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Deutsche Bank Reiterates on Youku Tudou on In-Line 3Q Revenue, Weak 4Q Outlook

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In a report published Friday, Deutsche Bank analyst Alan Hellawell III reiterated a Hold rating and $23.00 price target on Youku Tudou (NYSE: YOKU).

In the report, Deutsche Bank noted, “Youku booked total rev of Rmb858m in 3Q, slightly beat DBe/consensus by 1%/1%. Yet, 3Q ad rev (Rmb745m) fell short our est. (Rmb762m) by 2%. Excluding the impact from amortization rescheduling (add back Rmb144m in COGS), 3Q non-GAAP GPM was 28.5%, broadly in-line with DBe but 2ppt below the Street. On higher-than-expected SG&A, non-GAAP OPM/NPM was still 3.2ppt/1.8ppt below DBe 0%/0.8%. Quoting a soft FMCG ad spending outlook, mgmt guided Rmb780-820m 4Q ad rev (+36-43%YoY), with mid-point 6% lower than DBe while total revs guidance missed the Street by 4%. Although the co is targeting a non-GAAP breakeven in 4Q after accounting adjustment, we believe major NT challenges such as mobile monetization and low sell-through rates in lower tier cities remain unsolved. Maintaining Hold.”

Youku Tudou closed on Thursday at $26.36.

Latest Ratings for YOKU

DateFirmActionFromTo
Mar 2016Summit Insights GroupTerminates Coverage OnHold
Oct 2015CitigroupInitiates Coverage OnNeutral
Oct 2015CitigroupInitiates Coverage OnNeutral

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Posted-In: Alan Hellawell III Deutsche BankAnalyst Color Reiteration Analyst Ratings

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