Pacific crown rises to win the market

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Beijing time September 5 Evening News, the Pacific Crown Securities published a study today, the Nasdaq:yy share rating to "outperform", the target price of 52 U.S. dollars.

The following is the full report:

The music business of the gathering time is developing. Due to the underestimated scale effect, we are satisfied with the competitiveness of the gathering times. The current stock price of 52 dollars was raised to "outperform the market".

-The increase in the number of paid subscribers to the music business is accelerating, and the average revenue per user (ARPU) growth potential is greater than other companies

In the second quarter, the gathering era added 140,000 paid users of music services. With the cooperation of the "happy Boys" of Hunan TV, we expect the increase in the number of paid subscribers in the third quarter to continue. We believe that the online business and offline business cooperation will give a great advantage to the platform popularity of the era. In addition, we believe that the current ARPU of the gathering age is lower than other social video sites, so ARPU will grow.

-The scale effect is underestimated and the competitiveness of the era is optimistic

We have seen the scale effect of the music service in the time of the gathering, which includes the number of users, the quality of performers, and the level of activity of the platform. We will continue to pay close attention to the competitive situation, but we are also more optimistic about the competitiveness of the era of Reunion.

-Transfer to mobile platform does not have much impact on the music business in the gathering time

The social video business of the gathering era is being commercialized through the form of value-added services, so the music business of the gathering time will move well to the mobile platform. We believe that in terms of commercialization and cost, the impact of the gathering era is limited, and mobile Internet will be an opportunity.

-Rating to win the market, the target price of 52 U.S. dollars

We believe that the risk of increased competition has been reflected in the discount on the share price relative to the expected growth rate during the gathering period. Our target price is 52 dollars. According to the 2014 earnings per share forecast of $1.73, which is equivalent to a forward earnings ratio of 30 times times.