Goldman Sachs maintains a 'Neutral' on E-House (China) Holdings (EJ); Q2 Review

August 17, 2012 9:03 AM EDT
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Goldman Sachs maintains a 'Neutral' on E-House (China) Holdings Ltd (NYSE: EJ) price target of $6.80 (from $7.68).

Analyst, Yi Wang, said, "Highlights: (1) Primary agency revenue came in at 33% of mgmt’s full-year target in 1H, down 9% yoy mainly due to 9% yoy ASP decline while commission rate remained stable at 0.9%. Mgmt expects volume in 2H to be higher than 1H and thus drive its primary agency revenue to trend close to the target. (2) The revenue growth trend of online service accelerated to 30% yoy in 2Q, but 1H (+19% yoy) fell below full-year guidance of 30%. Mgmt expects strong growth to continue with performance-based ecommerce business playing an increasingly important role (now online advertising contributes more than 85% of online revenue). (3) Mgmt projects a flattish yoy growth for information and consulting services as increase in revenue from information services will be largely offset by a decline in
consulting revenue. Overall, mgmt maintains its full year revenue guidance of US$490mn-US$510mn. (4) The company turns to make profit in 2Q with non-GAAP net margin coming in at 6%, up 3pp yoy. However, 1H non-GAAP net margin was -6%, down 11 pp yoy, and 19pp below our previous full-year estimate."

FY12 EPS estimate lowered from (0.30) to (0.33)

For an analyst ratings summary and ratings history on E-House (China) Holdings Ltd click here. For more ratings news on E-House (China) Holdings Ltd click here.

Shares of E-House (China) Holdings Ltd closed at $5.59 yesterday.

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