Maintain a buying rating for the time of the gathering

Deutsche Bank today released a study to maintain a "buy" rating for the Nasdaq:yy stock and raised its target share price to 90 dollars.

The following is the full report:

Quarterly results exceeded expectations, first-quarter results forecast stable

The gathering era made another outstanding quarter, the revenue chain growth of 26%, year-on-year growth of 129%, to 612 million yuan, higher than the performance forecast on the line (520 million U.S. dollars), compared with the Deutsche Bank's expectations and analyst expectations of the average high 9% and 16% respectively. The music business of the gathering time continued to maintain good momentum, the revenue growth of 47%, year-on-year growth of 217% to 337 million yuan, higher than the Deutsche Bank's expected 19%. As a result of the music business's contribution to revenue, gross profit margin of 52%, compared with Deutsche Bank's expectations and analyst expectations of the average lower 1.6% and 0.4% respectively. Due to increased operational efficiency, non-US general accounting standards for ads per share earnings of 0.6 U.S. dollars, higher than the Deutsche Bank's estimated 0.53 U.S. dollars and the average analyst estimated 0.47 U.S. dollars, up to 13% and 27% respectively.

In the first quarter, revenue was expected to grow 100% per cent year-on-year, significantly higher than Deutsche Bank's projected 94% and an average 77% of analysts ' forecasts. We believe that the performance of more than expected to reflect the era of competition in China's grassroots entertainment market execution and commercialization capabilities. At the same time, we believe that the recent introduction of the Independent education brand and Platform 100 education will become the catalyst for the long-term growth of the era. Raise the target share price by 11% to $90. Maintain a "buy" rating.

Live show will grow and accelerate investment to "grasp the market"

We believe that a number of companies such as Youku and NetEase have entered the online live show to show the great potential of the market, but the market competition may also be fierce. With regard to live game Live (21% to 21 million yuan), we think the era of gathering is likely to be commercialized through electronic competition rather than advertising. In the long run, this is a more sustainable business model. The expansion of the market is likely to lead to more space for development, and we expect to increase investment in the gathering time, for talent recruitment, more frequently organize the entertainment of the Times brand, deepen with the offline studio and recruitment agencies.

Online Education: Small short-term impact, still exploring business models

We expect that from 2014 to 2015, the online education business of the gathering era will remain in the nurturing phase, contributing little to the 2014 and 2015 revenues. Although the gathering time indicated that will focus on the platform construction, but we anticipated the gathering time also will promote the brand strategy gradually, but the upfront investment will be less.

The target share price rises 11% to 90 dollars, maintaining "buy" rating

Taking into account competition in the music market, we will cut the revenue forecasts for 2014 and 2015 respectively by 7% and 6%, and reduce the earnings per share of ads by 3% and 1% respectively. Our new target stock price is 90 U.S. dollars, which is based on: 1 of the market surplus growth than 0.8 times times unchanged; 2 The annual compound growth rate of 2014-2016 non-US GAAP net profit is 46%, higher than previous 40%;3) 2014 earnings per share is expected to be 2.4 U.S. dollars, lower than the previous 2.5 U.S. dollars. This target shares the equivalent of 2