Deutsche Bank Starts 58.com Inc (WUBA) at Buy
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Deutsche Bank initiated coverage on 58.com Inc (NYSE: WUBA) with a Buy rating and a price target of $65. Analyst Alvin Jiang highlighted its superior growth rate and market leadership.
"58.com is the fastest growing company in the online advertising market in China, with revenue expanding five-fold in the next five years. Having merged with Ganji, it dominates the classified service market with an 80% market share and has 10m SME users compared to Baidu’s reach of 0.6m. Its coverage of over 200 cities, promoted by a workforce of 16,000 off-line sales staff has created a significant barrier to entry, while the co-operation with 23% owner Tencent is increasing its long term monetization potential. We forecast a strong shift in profitability to a 17% margin by 2018 and initiate with a BUY rating," said Jiang.
Shares of 58.com Inc closed at $47.52 yesterday.
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