Morgan Stanley to maintain YY overweight rating target price increased to 98.10 U.S. dollars

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The March 5 Evening News of Beijing Time, Morgan Stanley released its investment report today to maintain the "overweight" rating of Nasdaq:yy shares, raising its target share price from $62.30 to $98.10.

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

We believe the share price will continue to be strong this year, thanks mainly to strong business growth and new revenue drivers, such as mobility and education. In the quarter, net profit rose nearly 480% per cent year-on-year, thanks mainly to the strong performance of the music and gaming business and the rise in profitability.

Performance exceeding expectations: 2013 fiscal year in the quarter, the total revenue for the period of 612 million yuan, the chain growth of 26%, year-on-year growth of 129%, compared with the company's guiding expectations of the upper limit of 18%. Net profit of 191 million yuan, the chain growth of 48%, year-on-year growth of 476%.

Positive factors: 1 revenue from music, web games and other Internet value-added services grew by 66% to 217% per cent year-on-year, while music paid users grew 165% per cent year-on-year, but still less than 1% of the number of active users. 2 profit from strong revenue growth and cost efficiency, operating margins rose 19% to 32% year-on-year in the fourth quarter. 3 The Gathering era, the first quarter of the 2014 fiscal year revenue will increase 98% to 102% year-on-year.

Negative factors: From the seasonal factor, the fourth quarter was a relatively strong quarter, but the number of paid game users fell by 2% to 433,000, while the number of paid game users in the past two years rose by 30% and 27% respectively.

Publishing educational Platform: The new independent brand online education platform, "100 Education" (100.com), has been released recently, aiming at providing higher quality teaching content to the wider student users at lower cost, more convenient way and more. After the platform was released, it attracted a lot of teachers ' advice. Gathering time through the revenue sharing model to attract the best teacher talent, which will promote the growth of students, forming a strong network effect.

Valuation: We continue to maintain the "overweight" rating of our share of the era, raising our target share price from $62.30 to $98.10.