T.h.capital publishes investment Report today to maintain the art Dragon stock holding rating

Summary: Check the latest quotes Beijing time August 12 Evening News, investment company T.h.capital today to release investment reports, the maintenance of Art Dragon Stock (Nasdaq:long) hold a rating. The following is a summary of the report: Art Dragon will be in the U.S. Eastern Time August 14, 2013 U.S. shares

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Beijing Time August 12 Evening News, investment company T.h.capital today issued an investment report to maintain the Art Dragon stock (Nasdaq:long) "Hold" rating.

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

The Arts Dragon will be in the U.S. Eastern Time August 14, 2013 after the U.S. stock market close (Beijing time August 15) released the second quarter of 2013 fiscal year results, and on the same night 8:30 (Beijing time August 15 8:30 A.M.) to hold a earnings conference call.

In our view, the second-quarter performance of the Arts dragon may not be higher than Wall Street's expectations, as there is a pause in cooperation with where to go (Qunar). In addition, as we continue to invest in mobile and promotional returns, we believe that the benefits of the art dragon are also under pressure. As for the third quarter, because competition in China's online travel market is relatively moderate compared with last year, this is a negative factor for the growth of the art Dragon's revenue. For this reason, we think the Art Dragon's third-quarter revenue is not expected to be higher than Wall Street's expectations. We are still waiting for a clear and sustainable profitability before we continue to maintain the "hold" rating of the Art Dragon stock.

Second-quarter revenues will coincide with guidance expectations, and Wall Street's expectations may be too rosy: in the second quarter, the Arts dragon faces two big challenges: 1 A disruption to where to go and 2 to continue to invest in online hotel booking business. We expect the second-quarter earnings of the Arts Dragon to reach the upper limit of the guiding expectations. The guiding expectation of the Arts dragon is that revenues will reach $35.7 million trillion to 38.8 million U.S. dollars, up 15% to 25% per cent year-on-year. Wall Street's expectation is that revenues will reach $40.6 million trillion, an increase of 30.7% per cent year-on-year. For the Arts dragon, this expectation may be difficult to achieve.

Diluted earnings per share or below Wall Street expectations: In the second quarter, the Arts Dragon has invested heavily in the mobile channel sector. Our data show that during the period from May 8, 2013 to July 22, the use of art Dragon's tourism has increased by 63% in China's 17 top Android app stores. Because of its low base, the increase was higher than that of other major competitors. In the second quarter, the number of hotels booked through the Art Dragon application and mobile website accounted for more than 20% of the overall reservation, above 15% in the first quarter, and surpassed the call center as the second largest booking channel. But to achieve the goal of "becoming China's largest mobile and online booking service provider", the Art Dragon still has a long way to go. To this end, we believe that the second-quarter art dragon per share of the United States depository shares diluted loss will be less than Wall Street 0.10 U.S. dollars and we expect 0.08 dollars.

Third-quarter performance expectations: Although the third quarter is the season of leisure tourism, and art Dragon is also in a more favorable position, but this July, the average daily page visit (PV) and daily Independent user visits (UV) is basically flat. As a result, Wall Street's expected third-quarter revenue will reach $46.9 million trillion (up 39.1% from a year earlier) may be overly optimistic. Wall Street's expected quarter-on-quarter rise of 15.7% per cent, while the art dragon in the third quarter of the fiscal year 2012 Quarter-on-quarter growth was only 7.5%.

Valuation: While we believe that the art Dragon is gaining a share in the hotel reservation market, intense market competition could undermine its future revenue growth and profitability. In addition, investment in the mobile sector will also bring the art Dragon short-term profit margin pressure. To this end, we have a wait-and-see attitude towards the Arts Dragon and continue to maintain its "hold" rating. (Li Ming)