Jaffray maintain auto Neutral rating target price 38 USD

Beijing time May 7 afternoon news, the U.S. investment company sent Jay today released a study to maintain the auto (nyse:athm) stock "neutral" rating, as well as the 38 dollar target share price.

The following is the full report:

After auto first-quarter results and second-quarter results, the company has gradually established a good reputation among investors, so we maintain a general view of auto. In the first quarter, auto accounted for 48% of Chinese users ' online access to car information, leading to 4 times times the number of their second competitors. We believe that auto's strategy around advanced car content will help the company maintain its long-term leadership. Although bullish on the company's advantages, we believe that the current share price has reflected the auto market position. We maintain a "neutral" rating on auto stocks and a 38 dollar target share price.

Auto achieves continuity of performance

Auto's first-quarter results were better than analysts expected, while the second-quarter revenue outlook grew. We believe that this will help to convince investors of auto performance continuity. Auto reported a first-quarter revenue of $55 million trillion, compared with an average of 54 million U.S. dollars. Earnings per share were $0.20 trillion, compared with an average forecast of 0.18 dollars by analysts. Auto Forecast, the second quarter revenue is 75.9 million to 79.3 million U.S. dollars, the middle point than the analyst average expected 5% higher.

Investment theme unchanged: Chinese users ' attention to vehicle information is transferring to online channel

We believe that auto's first-quarter results and second-quarter results confirm our view that China's online auto advertising market is still in its infancy, and that the overall development of China's automotive media and the transfer of content consumption to online channels will benefit auto. In the first quarter, Auto maintained 48% per cent of the market share and was stable in terms of the length of time users viewed the car information online, so auto would be one of the core beneficiaries of the trend. And as we pointed out earlier, and as Eric's Institute has shown, China's auto industry is now putting 20% of its advertising budget into online channels, compared with about 40% in the US.

Small adjustments to performance expectations

Based on Auto's second-quarter results and Company management's statement on the earnings call, we made the following adjustments to auto's performance expectations:

-Revise the second quarter revenue forecast by 8%, considering the latest revenue forecasts. Considering revenue forecasts and the strength of the first-quarter results, the 2014 and 2015 revenue forecasts were raised by 3% respectively. This revenue growth will come from both the advertising business and the reseller order business.

-Despite strong first-quarter operating margins and a 460-point increase in the chain, we believe Auto's operating margins will be under pressure. We still expect the operating profit margin of auto to fall by 200 basic points in 2014.

-If the renminbi continues its recent trend against the dollar, it will have a 3% negative impact on auto's performance in dollar terms.