Maintain auto stock neutral rating, and increase target share price from USD 34 to 36 USD

Goldman Sachs today released its investment report to maintain the "neutral" rating of auto Equities, nyse:athm its target share price from $34 trillion to $36.

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

First Quarter results: Auto 2014 The first quarterly results exceeded expectations. The total revenue was 342 million yuan, up 67% from a year earlier, 5% higher than our forecast, and 2% higher than the average forecast for analysts surveyed by Bloomberg. Based on non-US general accounting standards, diluted earnings per share of 0.20 U.S. dollars, an increase of 48%, compared with our forecast of 13%, higher than Bloomberg forecast 9%. Auto expects the second-quarter revenue to reach 472 million yuan to 493 million yuan, 9% higher than our forecast and 6% higher than Wall Street's forecast.

Analysis：

1 advertising revenue growth of 52% year-on-year, of which auto manufacturers advertising revenue growth of 10% year-on-year, car dealers advertising revenue growth of 102%. The first quarter, auto mobile applications of the daily independent user access to 2.3 million, the chain growth of 30%, accounting for 32% of desktop traffic.

2 The Subscribers ' subscription revenue grew 109% Year-on-year, and the number of dealers increased by 105%. The increase in the number of traders comes mainly from the non-tier cities, where dealers outside the first-tier cities account for 93% of the company's dealers. Given auto's current focus on traders ' penetration and lower-ranking cities, we believe that subscription fees will continue to be under pressure.

3 The company management specifically mentioned the recent E-commerce activities of new vehicles, that is, from April 15 to 18th to more than 1700 potential car buyers sales vouchers. By the end of April, users had used 550 coupons to buy a new car.

Adjustment of performance expectations: We will auto from 2014 to 2016 per share of diluted earnings forecast to increase by 1% to 4% to reflect stable revenue growth.

Valuation: We continue to maintain the "neutral" rating of the auto stock, bringing the target share price from USD 34 to $36.