WUBA: Investing In New Businesses For New Growth; Macro Environment Is Not Positive; Maintain BUY
WUBA will report 2Q18 results on August 16th before the markets open with an 8am EST conference call. We are cautious on WUBA’s 2H 2018 as it is more a macro play. On the macro front, the deleveraging movement is impacting housing and job areas. On housing front, the government has clearly indicated its policy, which is controlling price and transaction volume. On the job front, as major shareholders for many enterprises are facing pressure to repay debts, this puts them in contraction mode instead of expanding.