Risk/reward profile still unattractive - 8454 TT; HOLD-OPF
​Momo’s March YoY sales growth slowed vs 2M16, as we feared. Although we expect online shopping revenue to likely rise over 20% YoY off a low base, we remain cautious on likely margin pressure due to promotions, and continuing contraction in the high margin TV & catalogue businesses. The stock is trading at 22x 2016F P/E with 11% 2017F EPS growth, which is fair in our view. Future changes to regulation are a likely overhang for the company.
momo.com Inc. is a Taiwan-based company principally engaged in the network-related business and the television and cataloging business. The Company is mainly engaged in television shopping, online shopping, catalogue mail order, personal insurance agency and property insurance agency businesses, as well as the provision of travel related services. The Company operates its businesses mainly in domestic market.
Yuanta is a Taiwan-headquartered brokerage with a growing presence in Asia, especially across Greater China. Our team of 140+ provides cutting-edge analysis on key sectors, spread across offices in Taiwan, Hong Kong, Shanghai (A-Share), Seoul and Jakarta. With an ever-expanding coverage universe of 400+ companies, we provide in depth analysis with unique local color to investors. Consistently being voted the Best Investment Consulting Firm in Taiwan in the AsiaMoney broker poll is evidence of our strength. We target providing an extensive range of research, from small, to mid-sized, to large cap. We bring you the big, well-covered names, as well as going off the beaten track to research the less-familiar companies.
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