China flash-sale analysis report by JPM's Alex Yao
Dated Jan 31. This guy disclaimed VIPS is JPM's investment banking client. He carefully selected 3 listed merchandise on VIPS and DANG, and drew a conclusion that VIPS offers better discount than DANG does. Yoday he even gave DANG $7.5 target price. Keep this in mind, as of Jan 22nd, VIPS has 130 brand names and DANG has 106. And DANG is rapidly closing the gap with its much bigger customer base.
VIPS and DANG have similar quarterly GMV. DANG flash-sale is platform based and they only record commission into revenue. There is no reason DANG is only worth $1B while VIPS $8B.
Chinese analysts in investment banks don't have any moral. Because DANG's major flashsale competitor VIPS is JPM's client, Alex Yao just gave DANG $7.5 target price ignoring DANG's much improved operation results. Since last Summer he has been urged investor to sell DANG and buy VIPS.
Precisely. The numbers don't lie. If DANG keeps putting up profitable quarters and continues to demonstrate snowballing revenue, we'll see pps multiples similar to those enjoyed by VIPS over the past year.