Jaffray will increase its rating target price by 260 USD

Beijing time August 15 Morning news, the U.S. investment company sent Jay Today published a research report, the only product will (Nyse:vips) stock rating maintained in the "overweight" (overweight) unchanged, and its target price from 224 U.S. dollars to 260 U.S. dollars.

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

Conclusion：

Only the second-quarter revenue growth was achieved and expectations for third-quarter revenues were 3% higher than average Wall Street analysts ' forecasts. We believe that this trend confirms that the only product is moving further towards its goal of becoming a leader in China's E-commerce market, which is a greater opportunity than the company's initial goal of leading the market. One of the downsides of the product is that profit margins will be negatively affected by the company's investment in future growth, and we believe that this investment is the right strategy in the long run.

In the second quarter, only the number of active users and total orders were strong, mainly because of the acquisition of the company's purchase of Lok Bee Network transactions help. We reiterate the "overweight" rating of the only product and raise its target price from USD 224 to $260.

-second-quarter revenue exceeded expectations, but margins were disappointing:

Only the second-quarter revenue of the goods will be 829 million U.S. dollars, compared to Wall Street analyst average forecast of 795 million U.S. dollars high 4%; earnings per share of 0.44 U.S. dollars, less than the analyst's average forecast of 0.46 dollars, mainly because of the pressure on profit margins. The only product forecast was a third-quarter revenue of $850 million trillion to $860 million, a 3% higher than the average Wall Street analyst's expected 830 million dollars.

We note that the company's revenue was supported by the firm's takeover of the Lok Bee Network, which contributed 2 million orders in the second quarter and contributed 18 basis points to its 121% organic order growth (overall growth of 139%).

-The growth of the market business brings about opportunities to increase profitability:

Only the third-party platform revenue for the product will now account for less than 10% per cent of total revenue, and the company's goal is to develop the business faster than overall revenue growth. We believe that the third-party platform revenue in fiscal 2015 will account for 15% of the total revenue.

We also believe that only goods will be cautious in developing third-party platform business, with the aim of ensuring that the shopping experience is still up to company standards. It takes time to develop a policy and implement it, and we think that it will focus more on the long-term user experience than on pushing up profit margins in the near future.

-2015 revenue Forecast:

We have raised the revenue growth forecast for 2015 only to 71%, which was expected to grow 50%, based on the firm's second-quarter performance. While the only product does not provide revenue growth forecasts for fiscal year 2015, we think Wall Street analysts ' 57% growth expectations are too low because their business is growing faster. We believe that Wall Street analysts will raise expectations for 2015 's revenue growth after the second-quarter revenue exceeded expectations.

-Change of opinion:

We will increase the revenue growth forecast for 2015 only from 50% to 71% to reflect the continued acceleration of the revenue growth of the goods. We adjusted the operating profit margin of the 2015 only to be relatively flat at 3.6% (compared with the expected operating profit margin of 3.3% in 2014). The only product is investing in future growth, which we think is right in the long run.

-Valuation and target price:

We maintain the stock rating of the only commodities holdings in the "overweight" unchanged and raise its target price from USD 224 to $260. This increased target price is based on the 2015 fiscal year revenue forecast and 2.5 times times the market sales rate (and assumes that only the net cash will be 575 million dollars, the external circulation of the United States depository Receipts in the total of 59.7 million shares, but also reflects our 2015 fiscal year only to increase the revenue growth forecast 18% impact.

Economic growth slowed sharply or the economic slowdown lasted longer; Internet and E-commerce were accepted slower than expected; online payment security; delivery costs rise; competition.

-Company Profile:

The only product will be the leader of China's flash-buy market. (Tangfeng)