Morgan Stanley maintains Dangdang-holding rating

Beijing time February 28 Morning News, Morgan Stanley published a study today, the Dangdang (Nyse:dang) stock rating maintained in the "holding" (equal-weight) unchanged.

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

Financial results of fiscal year 2013:

-Profit exceeded expectations:

Dangdang net sales in the last quarter of 1.97 billion yuan, an increase of 22% per cent, compared to our expectations and the company's previous outlook are higher than 2%. Dangdang in the quarter to achieve profitability, its net profit of 22 million yuan, mainly due to sales portfolio and operational leverage improved.

-Gross margin growth:

Dangdang's gross profit margin for the quarter was 17.6%, flat on the chain, up 430 points from a year earlier. The main driving force for the continued pick-up in gross margin was the increase in profit margins, improved category maps and the growth of market GMV (up 154%). Clothing and fast-fashion products accounted for more than half of the total GMV in the quarter, according to Dangdang.

-GMV healthy expansion;

Dangdang's total daily commodity GMV (self-purchasing business plus market business) grew 80% Year-on-year, the fifth consecutive quarter higher than the increase in books and media products. Dangdang estimates that the first quarter of the 2014 fiscal year growth of 30% per cent year-on-year, in part because the book distribution business exempt from 13% value-added tax, and the market business GMV is expected to grow 100% year-on-year.

-Healthy User access:

Dangdang total Active users in the last quarter of 8.9 million people, an increase of 19%. In the quarter, Dangdang gained 3.1 million new users, a record high. According to our calculations, the marketing cost per new user is 27 yuan, down 21% from the same period last year. Total orders for the quarter reached 18.1 million, an increase of 13% per cent year-on-year.

-Improved performance:

Dangdang's performance spending in the quarter hit a record low of 9.7%, down from 12% in the same period last year, mainly due to employee productivity growth, reduced staff size and the technical haste of the performance business. Inventory management continued to improve, turnaround days for 88 days, less than 97 days of the same period last year.