Goldman Sachs maintains only goods will buy ratings

Beijing time February 15 Morning news, Goldman Sachs published a study today, the only nyse:vips stock rating to maintain the "buy" (purchase) unchanged, the target price remains unchanged.

The following is a summary of the contents of the report:

Buy 75% Shares of Lok Bee Net: May bring 3 kinds of resultant force

News:

It has purchased 75% per cent of the Lok Bee network from Ovation Entertainment (hereinafter referred to as "Ovation") with a total price of $132.5 million, including cash payments and financing related to debt obligations. It also reached a framework supply agreement with the Lok Bee Network and the Ovation China subsidiary.

Ovation will provide its own brand of cosmetics, clothing and consumer products, through the vip.com and lefeng.com retail, the only product will be promised to achieve at least 900 million yuan in 2014 years of sales, and can be based on sales commission.

Analysis：

The market sales rate for the deal is 0.3 times times, according to the management of the Lok Bee Network, which is expected to sell 4 billion yuan in 2014. Global cosmetics brands and retailers have a 2014-year average market rate of 2.1 times times, with global retailers averaging 2.6 times times (data from the average expectations of analysts surveyed by Bloomberg).

We believe that the resultant force will come mainly from complementary products, marketing and logistics, since the two companies have similar user bases. About 75% per cent of the users were women, and clothing, shoes and bags (including sportswear) accounted for 65% of their 2012 sales. We expect the total number of active users in 2013 to reach 10 million. The Lok Bee Network sells cosmetics to a similar group of users.

Beauty products in the only products in the 2012 sales of the proportion of 11%, the two sides of the planned cooperation can improve the cross-selling opportunities, and for the only product users to provide more products. In addition, we believe that the two companies can also share warehouses and integrate logistics and distribution services.

Le Bee is one of the leading retailers of beauty and personal care products in the Chinese market, founded in 2008, renowned for its celebrity marketing and own-brand products. China's online 0 sales of beauty and personal care products reached 65.2 billion yuan in 2012 (from the data provided by Eric Consulting), and the market growth prospects are broad.

Influence：

We will keep the performance expectation, stock rating and target price unchanged for further details.