Jaffray to stay in the gathering time to increase the rating target price 105 USD

Beijing Time May 6 Evening News, the U.S. investment company sent Jay Today published a study to maintain the NASDAQ:YY stock of the "overweight" rating, as well as the 105 dollar target share price.

The following is the full report:

The first quarter of the gathering time report was 2% higher than the analyst average, and the second-quarter revenue outlook was 5% higher than the average analyst's estimate. We still believe that the multiple revenue growth drivers of the era will drive revenue growth and long-term user growth, while helping to strengthen profitability. At the same time, our current valuation model has not yet taken into account the commercialization potential of online education services. We believe this will be a big boost for the company's future growth and profitability. We maintain a "overweight" rating for the gathering period and a 105 dollar target share price.

Performance

The first-quarter revenue and non-US general accounting standards reported in the gathering period were 107.2 million U.S. dollars and 0.56 U.S. dollars respectively, while analysts averaged 104.9 million and 0.51 dollars respectively. YY music, which accounts for 58% of total revenue, once again boosted total revenue growth. Revenues rose 228% in the first quarter from a year earlier, up from 217% in the fourth quarter of 2013. In the first quarter, the profit margin of the gathering era increased 90 basic points. We pointed out last quarter that, as the gathering time to the music business tilt, gross margin will gradually be affected, the future will reach 50%. We maintain this gross margin forecast. The gathering era also predicted that the second quarter revenue will be 745 million to 755 million yuan, the middle point than the analyst average estimated 712 million yuan higher than 5%.

Opportunities for online education will remain the focus

The gathering time on the earnings conference call again emphasized the opportunity of online education business. February 14, the gathering era of the education business brand as "100 education." The gathering era reaffirms that the number of teachers and the quality of courses on the 2014 educational platform will be upgraded, and commercialization will begin gradually in 2015. We have not yet included education business revenue in the 2014 and 2015 annual performance forecasts. Although we believe that the education business will not contribute in the next few years, the business will ultimately be the same size as the game business. and gaming business at present to gather time revenue contribution is about 35%.

Advertising revenue declines but is expected to rebound

The first quarter of the gathering time advertising revenue fell 25%. The company said this was partly due to seasonal factors, partly because of changes in the company's advertising sales strategy. Recent strategic adjustments focus on the ad-bit's non bundled sales. 2013, the gathering time to the advertising company packaging sales advertising, but in the future will gradually reduce the package for sale. That would be good for advertising, but it would take one to two quarters to raise the number of ads. The adjustment led to a landslide in first-quarter advertising revenues, but the advertising business is expected to rebound in 2014, while advertising revenues for 2014 will be flat in 2013, the gathering said.

Increased number of active paid subscribers (APA) and per-user average revenue (ARPU)

The game business grew better than expected, but at a slower pace than in the fourth quarter of last year. It is expected that this growth rate will be about twice times the industry average, or 15% to 20%. In music business, APA grew 12% to 1.006 million, slightly below our projected 1.091 million. However, ARPU growth of 2%, to 381 yuan, higher than our estimated 310 yuan. Online gaming business, APA growth of 6.5%. To 461,000, above our estimated 446,000. However, the ARPU of online games only grew by 4%, to 391 yuan, below our estimated 393 yuan.

Performance expectations Adjustment

We will be gathered in the second quarter of the era revenue forecast to increase by 14% to 748.2 million yuan, higher than the previous 657 million yuan. Similarly, we raised the forecast for earnings per share in the second quarter from $0.48 trillion to $0.51 trillion, compared with an average of 0.54 US dollars. We will be gathered time 2014 revenue forecast from 1.335 billion yuan to 1.519 billion yuan, the 2015 revenue forecast from 1.646 billion yuan to 1.897 billion yuan. We will raise the earnings forecasts for each share of the 2014 and 2015 from 1.94 and 2.56 to 2.16 and 2.81 dollars respectively. We are expected to maintain a share of the revenue during the period.

Maintain rating and target share price

We maintain a "overweight" rating and a 105 dollar target share price for the gathering era. We will be gathering time based on the 2015 U.S. General accounting standards per share of earnings expectations of the valuation multiples from 45 times times down to 40 times times. This is mainly due to the fact that we think the growth potential of the gathering era has diminished while the overall valuation of China's Internet concept stocks has been reversed.