Momentum Stock Watch: E-Commerce China Dangdang Inc. (DANG)

Company Profile:

E-Commerce China Dangdang Inc. operates as a business-to-consumer e-commerce company in the Peoples Republic of China. It primarily sells books, periodicals, electronic publications, consumer electronics, and audio-visual products through its Website dangdang.com. The company also sells general merchandise products, including fashion and apparel; beauty and personal care products; home and lifestyle products; baby, children, and maternity products; apparel and accessories; and footwear, handbags, and luggage. In addition, it operates the dangdang.com marketplace program, which enables third-party merchants to sell general merchandise products. The company was founded in 2000 and is headquartered in Beijing, the Peoples Republic of China.

Recent News:

E-Commerce China Dangdang Inc. will hold its annual general meeting of shareholders (the “AGM”) at 21/F, Jing An Center, No. 8 North Third Ring Road East, Chaoyang District, Beijing 100028, People’s Republic of China on November 18, 2015 at 2:00 p.m. (Beijing time).

Total net revenues for the second quarter of 2015 were RMB2,312.3 million ($373.0 million), a 29.8% increase from the corresponding period in 2014. Net loss for the second quarter of 2015 was RMB21.2 million ($3.4 million), or negative 0.9% of total net revenues, compared to net income of RMB28.8 million in the second quarter of 2014, or 1.6% of total net revenues.

According to the National Bureau of Statistics of China, China retail sales up by 10.9% in September 2015. An uptick in Chinese retail sales is a positive sign, as it implies that domestic demand is rising with better consumer sentiment and may boost growth in the struggling economy.

Fundamental Analysis:

Ninestocks analyzes several different financial aspects: Growth, Profitability, solvency and efficiency.

Growth – Measures the growth of both the company’s income statement and cash flow.

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Profitability – Measures the historical price movement of the stock.

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Solvency – Measures the solvency of the company based on several ratios.

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Efficiency – Measures the strength and historic growth of a company’s return on invested capital.

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Conclusion:

DANG’s strengths can be seen in its better profitability and robust efficiency. Its revenue has increased over last year. Technical indicators signal the bullish signs, as there is a bullish cross in MACD and Stochastic oscillator and RSI is increasing to 58.14. The P/BV ratio indicates it is undervalued compared to the average P/BV ratio of the industry and the sector. We rate E-Commerce China Dangdang Inc. (DANG) a STRONG BUY.