US investment bank sends Jerry to report today

Jaffray Piper Jaffray, the US investment bank, today issued an investment report reaffirming the "overweight" rating of the era stock (NASDAQ:YY), raising its target share price from $70 trillion to $105.

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

In the 2013 fiscal year, gathering time revenue was 20% higher than Wall Street's expectations, and revenue in the first quarter of fiscal year 2014 was expected to be 13% higher than Wall Street. We expect a variety of revenue drivers to continue to drive the era of revenue and user growth and profitability. In addition, the commercialization of educational business will promote the future of the gathering era of revenue growth and profit margins. To this end, we reiterate the "overweight" rating of the gathering period, which will raise the target share price from 70 US dollars to 105 dollars.

Quarterly results: Revenue was $101.1 million trillion, up from Wall Street's expected $84.5 million trillion. Based on non-US GAAP, the earnings per share is $0.60 trillion, up from Wall Street's expected $0.46 trillion. Music business revenue grew 217% Year-on-year, while the third quarter grew 161%. With a 250-point increase in gross margin, we expect the music business to lead to a slight decline in gross margins this year (the fourth quarter last year is 51.5% and this year is expected to be 50%). Operating margins were 31.8%, and the third quarter was 27.5%, thanks largely to reduced operating expenses. But we believe that sales will start to increase this year to promote the education business.

Education platform: In the earnings conference call, the gathering time again emphasized the education market potential. In particular, in the next few months, the gathering era will raise the use of educational platforms, with the focus this year on enhancing interaction. We believe that the educational platform will not bring significant revenue in the next two years. But in the end, it will be in the game business, or about 35% of the current revenue.

Provide opportunities for teachers to generate income: After the gathering era last month, the education platform attracted more than 9,000 inquiries from teachers interested in the platform. As mentioned earlier, the goal of the gathering era this year is to improve platform interaction, which means no commercialization. On the contrary, they provide income-generating opportunities for teachers. We believe that the most likely way for teachers to generate income is to collaborate with the age of the gathering to launch a large classroom (more than 1000 students), through which to promote their teaching experience and then to set up paid online small classes.

Valuation: We reiterate the "overweight" rating of the gathering period, which will raise the target share price from 70 US dollars to $105.