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1、 All relevant disclosures and certifications appear on pages 25 - 27 of this report.J International Ltd.DATE NASDAQ Buy Internet ServicesStifel Nicolaus does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a confl
2、ict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.FromTo Changes(Previous)(Current)RatingBuy Target Price$14.00 FY11E EPS (Net)0.31 FY12E EPS (Net)0.40 FY11E Rev (Net)47.1 FY12E Rev (Net
3、)65.1Stock DataPrice (06/20/11):$9.19 52-Week Range:$16 $9 Market Cap.(mm):$287.3 Shr.O/S-Diluted (mm):31.3 Enterprise Val. (mm):$183.1 Avg Daily Vol (3 Mo):NA LT Debt/Total Cap.:0.0% Net Cash/Share:$3.33 Dividend ($):$0.00 Yield (%):0.0% Book Value/Share:$2.51 S Chinas Online Dating Leader; Initiat
4、e with a BuyGeorge I. Askew(202) 756- Zim Yin(202) 756- Steve Rubis(202) 778-Initiation of CoverageWe are initiating coverage of J International Ltd. with a Buy rating on the shares. We are establishing a 12-month target price of $14.00, which equates to an enterprise value/adjusted EBITDA multiple
5、of 21.1x our 2012E adjusted EBITDA of $15.8 million. The target price is also supported by our discounted cash flow (DCF) analysis.J is the leading online dating website in China with 40.2 million registered users, 4.7 million average monthly active user accounts and 882,000 average monthly paying u
6、ser accounts in 1Q11. Increasingly Chinas singles are turning to the Internet to find a soulmate as urbanization and demographic changes have broken traditional spouse-seeking networks. Jiayuan serves these singles with safe, serious, results-oriented online and offline dating services. Jmonetizesit
7、susersthroughmessagingfees, subscriptions and the sale of value-added items.As industry leader, J benefits from significant network effects. Specifically with each additional new user, the J network becomes more valuable to every other user of the network. This network effect occurs at the local mar
8、ket level as well. At the end of 1Q11 there were 94 cities in China with at least 10,000 average monthly active users on J. As the company achieves critical mass in a local market, the conversion of active users to paying users accelerates, driving incremental revenue and high incremental profit mar
9、gins. We expect this trend to continue at J for the foreseeable future.We expect Jiayuan to drive growth over the next several years by leveragingitslocalmarketnetworkeffects;drivingproduct innovation; increasing the ratio of paying users to active users; and benefiting from secular trends driving d
10、emographic change in China, overall Internet usage and the online dating industry.Our financial estimates for Jiayuan reflect continued rapid revenue growth and solid margin expansion as the company benefits from the increased conversion of active users to paying users. For 2011, we estimate that J
11、will report year-over-year growth in net revenues of 85.4% and adjusted EBITDA of 125.8%. For 2012, we estimate that J will report year-over-year growth in net revenues of 38.3% and adjusted EBITDA of 26.1%.Investment Rationale We are initiating coverage of J International Ltd. (DATE) with a Buy rat
12、ing on the shares. We are also establishing a 12-month target price of $14.00, which equates to an enterprise value/adjusted EBITDA multiple of 21.1x our 2012E adjusted EBITDA of $15.8 million. The target price is also supported by our discounted cash flow (DCF) analysis. J is the leading online dat
13、ing website in China with 40.2 million registered users, 4.7 million average monthly active user accounts and 882,000 average monthly paying user accounts in 1Q11. Increasingly, Chinas singles are turning to the Internet to find a soulmate as urbanization and demographic changes have broken traditio
14、nal spouse-seeking networks. J serves these singles with safe, serious, results-oriented online and offline dating services. The companys critical mass of users in at least 94 cities across China drives network effects, increasing the conversion of active users to paying users. We expect J to drive
15、growth over the next several years by leveraging its local market network effects in cities across China; driving innovation in products and services; increasing the ratio of paying users to active users as the companys critical mass in local markets grows; and benefiting from secular trends driving Chinese Internet usage and the online dating industry in China. Network effects will increase as J penetrates new cities. J benefits from significant network effects as a result of its position as industry leader. Specifically, with each additional
