Morgan Stanley to give only goods will increase the rating target price of 259 U.S. dollars

Beijing time October 29 afternoon news, Morgan Stanley published a study today, the only nyse:vips (stock) stocks into the scope of the study, to give its "overweight" rating, as well as the 259 dollar target share price.

The following is the full report:

With the growth of online consumer-to-consumer sales and offline retailing in the Chinese market slowing, only goods will be in a good position to drive market share growth. Only products will have a strong distribution and logistics team. We believe that rapid sales growth and stable profit margins make them more attractive relative to their rivals.

Strong sales growth and stable profit margins

The only product will be an emerging online platform that will improve market share in the context of a slowdown in online consumer-to-consumer sales and offline retail growth in the Chinese market. We estimate that strong revenue and margin growth will lead to a 57% increase in profits in 2015, which is only 0.8 times times higher than that in 2015, compared to 1 times times the industry average.

Integrated logistics solutions will bring long-term positive

We believe that only goods will be able to provide profitable, fully integrated logistics solutions. This is due to: 1 higher order intensity; 2. The core business with higher profit margin and 3 the mode of combination of heavy assets and light assets; 4 The conflicts with multiple brands of online channel operation are reduced. By the end of 2015 and the end of 2016, the only product will plan to use the autonomous "last kilometer" express service to deliver 50% and 80% of orders respectively. The products will begin to provide warehouse management services for over 200 key suppliers. Only goods will say that the gradual introduction of the last kilometer express service to ensure the cost control, and faster to achieve investment recovery. This strategy strengthens product support from suppliers and accelerates working capital turnover.

Profit/Valuation

We expect that from 2014 to 2017, the adjusted net profit growth rate will be 54%, due to the annual composite growth rate of 43%, and the increase in operating efficiency in 2015. Our target stock price is equal to the 2015 forward earnings ratio of 58 times times, and 2016 35 times times. The forecast profit growth ratio is 1.1 times times and 0.8 times times respectively.

Critical risk

The acquisition of the Lok Bee Network has failed to bring synergies, and the growth of active users may encounter bottlenecks. (D-Gold)