The stock rating of the Good Future (NYSE:XRS) remains unchanged at the buy

Goldman Sachs today released its research report, keeping the stock rating of a good Future (NYSE:XRS) unchanged, while raising its 12-month target price from $17.50 to $19.

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

Better-than-Expected performance: New cities drive business growth; maintain a "buy" rating

Favorable factors:

Good future second-quarter results exceed analysts ' expectations, and the outlook for third-quarter earnings is similarly higher than expected. In the second quarter, the US depository receipts for the good future were $0.31 trillion, up 36% from a year earlier, up 151% per cent from the previous quarter, and the higher group expected to have 0.03 dollars (12%) and 0.02 dollars (9%) per cent of Wall Street analysts ' expectations.

A good future is expected to have a net revenue of $69.5 million to $71 million in the third quarter, with a 44% per cent increase compared with a year earlier, with the higher group expected to be 13% and 14% higher than the average Wall Street analyst expected.

Investment advice:

Good for the second quarter. The main drivers for revenue exceeding expectations were the expansion of facilities and price hikes, with the main driver of profit margins exceeding expectations coming from enhanced business portfolios and cost-containment measures. The good future comes from smaller cities, with the exception of Beijing and Shanghai, where revenue growth is accelerating, with a year-on-year growth rate of 121% per cent in the second quarter.

The good future has expanded the transport energy in Shenzhen, Guangzhou, Nanjing and Xi ' an, which has increased the enrolment of students, and this is largely due to the good future in these markets has established a very good brand reputation. The average selling price for the next quarter will be 7% higher than the same period last year, in line with the planned price increase.

A good future closes four poorly performing learning centers, thus strategically reducing the low margin of one-to-one business. In the second quarter, the revenue from the business as a future contribution was 19% per cent of the company's total revenue, down from 21% in the same period last year, which bodes well for the future profitability Outlook.

In addition to its own financial strength, the future also recognizes that online education has become an emerging trend and is deploying web-based and mobile devices to capture this long-term development opportunity. So far, a good future online tutoring platform is still a complementary channel, but more products will be introduced in the future. Students will be able to get a selection of course content through mobile devices.

The eduu.com website is expected to become a more important platform to help students learn from each other. Currently, corporate management is evaluating market opportunities.

We will be good for the next 2014 to 2016 fiscal year between the expected increase in earnings per share 1%, 5% and 7% to reflect the strong earnings performance of network expansion activities and to raise the target price for the next 12 months from $17.50 to $19, based on a 0.85 times-fold peg ( Ratio of market surplus growth).