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Dangdang is a speculative investment versus Alibaba, but it has higher upside.
Analysts are expecting earnings of $0.06 per share on revenues of $323.4 million.
Dangdang last reported earnings on August 18th when it beat both top and bottom line expectations, but apparently missed market expectations, sending its stock down 11%.
Below are some things to look for during Dangdang earnings:
Things to look for:
According to the Q2 conference call, management expects net revenue of $320 million for Q3, or a 30% year-over-year increase. Management also expects GMV to increase 80% year-over-year to $280 million.
Given Alibaba's Q3 topline beat, Dangdang should beat management's expectations as well, although it is uncertain whether Dangdang will beat the market's expectations......
Conclusion
Dangdang is China's largest bookstore by selection and revenues.
The company has in recent years attempted to expand to adjacent categories such as apparel and baby/maternity products in an attempt to grow revenues and profits.
So far these attempts to expand into other categories have been met with limited success. Book and media revenue still made up 64% of revenue for 2013, compared to 62.6% in 2012.
Dangdang revenues are growing at a rapid pace, and its margins now make it profitable, but it remains to be seen whether Dangdang can do well outside of its book niche.
In the first quarter, Dangdang only had a 2% market share of the Chinese E-commerce market, behind JD's (NASDAQ:JD) 23% and Alibaba's (NYSE:BABA) 70%.
http://seekingalpha.com/article/2670015-dangdang-earnings-preview |
