WUBA: 3Q17 Data Suggest Performance Likely to Beat Consensus; Downward Trend in Housing Sector is Worrisome; Maintain BUY
WUBA will report 3Q17 results on Monday, November 13, 2017 before the market opens with an 8am ET conference call. Based on our data and calculations, we believe WUBA’s 3Q17 revenue is likely to outperform consensus at $387.7M (RMB2,569.6M) and our model at $394.2M driven by the growth in total paying merchants. In China’s housing market, the data showed some slowdown in transactions, which we believe can be a negative growth factor for the company’s housing business. However, as WUBA is innovating new ways of doing business, including big data driven business and monetization as well as more rentals in the housing sector, we believe the company has the capability to weather the weakness in the housing market. We maintain our BUY rating.