Morgan Stanley maintains the time of the gathering to increase its rating target of $104

Beijing Time August 7 Evening News, Morgan Stanley published a study today to maintain the NASDAQ:YY "overweight" rating, the target share price from 100.90 U.S. dollars to 104.20 dollars.

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

Second-quarter results: The total revenue for the 841 million yuan, an increase of 106%, higher than the company's guidance expected (growth of 82% to 85%), compared to our expected high 9%. Based on non-US general accounting standards, net profit of 258 million yuan, an increase of 107%. Diluted earnings per share of $0.70 trillion, about 20% higher than Wall Street expectations.

Users continue to grow: The second quarter, the total number of active users for the first time breakthrough 100 million, the chain growth of 5%, the year-on-year growth of 20%. In addition to the music business, new services such as game broadcasting and online dating have driven increased user interaction and overhead.

The music business was strong: online music and entertainment revenues grew 203% year-on-year, accounting for 61% of the total revenue from the era, compared with 42% in the same period a year earlier. The main benefit was a 78% increase in the number of paid subscribers, with average revenue per user (ARPU) up 70% year-on-year. Of the paid music users, 26% are paid through mobile devices.

The new service is exciting: new businesses such as game radio and online dating have become the new growth engines of the era, with the second quarter contributing 4% and 3% of revenues respectively. Among them, real-time game broadcast revenue grew 243% year-on-year, online dating business growth of 300% Quarter-on-quarter. Gaming and advertising, by contrast, have been sluggish, with game revenues growing by only 10% per cent year-on-year.

Investing in future profit margins: Operating margins fell 3% in the second quarter, up 8% per cent year-on-year. Despite increased investment in the next few quarters, the gathering era is expected to maintain a stable operating margin. This is mainly due to operational leverage.

Valuation: We continue to maintain the "overweight" rating of our share of the era, raising our target share price from $100.90 to $104.20. (Li Ming)