Credit Suisse Assumes Coverage on E-commerce China Dangdang at Outperform
Admin March 13, 2014 Credit Suisse Assumes Coverage on E-commerce China Dangdang at Outperform2014-03-13T11:16:56+00:00 PT Changes, United States No Comment
In a report published today Credit Suisse Analyst Evan Zhou Assumed Coverage on E-commerce China Dangdang (DANG) with an “Outperform” rating, raising its price target to $19.50 from $14.00.
Also Read: BofA Merrill Lynch raises E-Commerce China Dangdang price target to $23
“Evan Zhou is assuming coverage on DANG with OUTPERFORM rating and a new target price of US$19.5. We see DANG’s margin improvement and profitability story is well on track with disciplined execution. Current valuation remains undemanding.” Credit Suisse said in a note to clients
It raised DANG’s FY15E EPS estimates by 30% “We revised up FY15E EPS by ~30%, due to slightly higher assumption on gross margin and further opex efficiency in fulfillment and G&A. We now expect gross margin to reach 21.3% by 2015, still slightly lower than its 2009 peak of 22.5%.”
Credit Suisse sees DANG’s current still valuation still attractive “From a market cap perspective, we see Dangdang’s current valuation of ~US$1.3 bn still attractive with 20.9 mn higher-end annual active customer base. We believe DANG can further increase monetisation on its users with expanded product category. Our DCF-based TP of US$19.5 implies 30x FY15E P/E.”
Shares of E-commerce China Dangdang (DANG) closed at $16.76 on Wednesday
Analysts at BofA Merrill Lynch have raised the price target on E-Commerce China Dangdang (DANG) to $23 from $14 citing Marketplace and efficiency initiatives. It reiterated its Buy rating on the stock.
“We raise our PO to $23 (from $14) on the back of a better understanding of co.’s new initiatives to drive marketplace expansion and to enhance fulfillment efficiency to support long term outlook, post our 4Q13 results note published on Feb 27.” BofA Merrill Lynch said in a note to clients.
“Contrary to consensus estimates that Dangdang will turn loss making again in 1H14, we expect it to remain profitable with 0.3%/1.0% net margin in 1Q/2Q14E. Hence, we raise our 2014/15E sales by 8%/29% and EPS by 1/40%. The valuation implies 1.1x our 2015E P/sales ratio and 32x P/E, which is at a discount to its peers’ 2.0x 2015E P/sales and 45x 2015 P/E.” it added.
Shares of E-Commerce China Dangdang (DANG) closed at $16.65 on Monday.