Stock Alert for E-Commerce China Dangdang Inc. (DANG)
  • Stock Alert for E-Commerce China Dangdang Inc. (DANG)
  • Stock Alert for China GengSheng Minerals Inc. (CHGS)
  • " />

    Stock Alert for E-Commerce China Dangdang Inc. (DANG)

    E-Commerce China Dangdang Inc. (NYSE: DANG) is a business-to-consumer e-commerce company in China. On its Web site, the Company offers more than 670,000 books and other media products as well as selected general merchandise products including beauty and personal care products, home and life style products, baby, children and maternity products, apparel, digital and electronics products. It also operates the marketplace program, which allows third-party merchants to sell their products alongside products sourced by the Company. DANG’s nationwide fulfillment and delivery capabilities, high-quality customer service support and scalable technology infrastructure enable it to provide a compelling online shopping experience to customers

    Share Statistics (28-Oct-11) FY2009 FY2010 % Chg Q22010 Q22011 % Chg
    Symbol DANG Revenue, $CNY 1,457.65 2,281.68 56.5% 515.68 790.78 53.3%
    Current price $7.37 Gross marg. 22.0% 21.0% -4.5% 19.1% 12.3% -35.6%
    52wk Range: $4.50-$36.40 Oper. margin 0.7% -6.6%
    Avg Vol (3m): 2,414,100 Net margin 1.2% 1.3% 8.3% -3.4% -3.6% 5.9%
    Market Cap. 583.06M
    Shares Outstanding 79.15M EPS, $ 0.00 0.02 -0.11 -0.07 -36.4%

    Source:, SEC Filings.

    Investment Highlights

    Shares of DANG jumped as much as 24% to $7.50 on Friday, with volume of 3.54 million shares traded.  Over the last 52-weeks, the stock has reached a low of $4.50 and a high of $36.40. The stock is currently trading above its 50-day moving average of $5.90 and below its 200-day moving average of $12.31.

    Shares in the Chinese business-to-consumer e-commerce company have gained 37.0% in the last five days and 40.4% in the last month, though the stock dropped 67.8% in the last six months.

    The Company last month said it started the operation of its Wuxi fulfillment center in late August, bringing its total warehouse space to 260,000 square meters currently from 210,000 square meters at the end of the second quarter.

    DANG intends to open two additional fulfillment centers, one in Fuzhou of Fujian province and the other one in Jinan of Shandong province, in the fourth quarter of 2011, to further increase its fulfillment capacity. The Company also said it continues to improve the delivery services by further shortening the delivery time. As of last month, the Company offers same-day-delivery services in 17 cities and the next-day-delivery services in 72 cities in China.


    Financial Summary

    DANG reported total net revenues of RMB790.8 million ($122.3 million) in the second quarter of 2011, a 53.3% increase from the corresponding period in 2010.

    Media product revenue for the quarter was RMB584.2 million ($90.4 million), representing a 34.1% increase from the corresponding period in 2010. General merchandise revenue was RMB191.5 million ($29.6 million), a 151.9% increase from the corresponding period in 2010. Other revenue including revenue from third-party merchants was RMB15.1 million ($2.3 million), a 288.9% increase from the corresponding period in 2010.

    The Company recorded an operating loss of RMB52.2 million ($8.1 million) for the quarter, as compared with an operating loss of RMB17.1 million for the same period in 2010, primarily due to the decrease in gross margin. Net loss was RMB28.4 million ($4.4 million), representing a 60.0% increase from the corresponding period last year.

    For the third quarter of 2011, DANG expects total net revenues to be in the range of RMB916 million to RMB928 million, representing year-over-year growth in the range of 51% to 53%. This forecast reflects the Company’s current and preliminary view, which is subject to change.


    Financial Strength (28-Oct-2011)




    S&P 500

    Quick Ratio (MRQ) 1.16 2.12 1.99 0.63
    Current Ratio (MRQ) 1.83 2.72 2.55 0.97
    LT Debt to Equity (MRQ) 0.00 9.52 11.63 98.39
    Total Debt to Equity (MRQ) 0.00 15.69 20.44 138.72
    Interest Coverage (TTM) 0.97 1.40 19.44

    Source:, SEC Filings.

    Technical Analysis


    DANG is above the upper Bollinger Band, implying that it is currently extended from its recent trend. Be aware, however, that a cross outside of the Bollinger Bands can sometimes be a signal of trend strength and not, necessarily, trend reversal.

    DANG’s MACD is currently indicating a weak bullish signal. Although the MACD is trending above the signal line, the indicator is still below 0, which suggests that the underlying moving averages are bearish.

    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/S
    Oct28-2011 symbol Share, $ $ Mn 2011 2012 2011 2012 Inc. AMZN 216.30 98.19B 110.92 68.02 2.01 1.52
    eBay Inc. EBAY 33.12 42.76B 16.56 14.34 3.70 3.14
    Catalog & Mail Order Houses Median       22.13 n/a 0.53 n/a
    E-Commerce China Dangdang Inc. DANG 7.42 587.27M n/a n/a n/a n/a

    Source: Thomson Financial

    DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND ON THIS REPORT. We are not registered as a securities broker-dealer or an investment adviser either with the U.S. Securities and Exchange Commission (the “SEC”) or with any state securities regulatory authority.  We are neither licensed nor qualified to provide investment advice.

    The information contained in our report should be viewed as commercial advertisement and is not intended to be investment advice.  The report is not provided to any particular individual with a view toward their individual circumstances. The information contained in our report is not an offer to buy or sell securities.  We distribute opinions, comments and information free of charge exclusively to individuals who wish to receive them.

    Our newsletter and website have been prepared for informational purposes only and are not intended to be used as a complete source of information on any particular company.  An individual should never invest in the securities of any of the companies profiled based solely on information contained in our report.  Individuals should assume that all information contained in the report about profiled companies is not trustworthy unless verified by their own independent research.

    Any individual who chooses to invest in any securities should do so with caution.  Investing in securities is speculative and carries a high degree of risk; you may lose some or all of the money that is invested.  Always research your own investments and consult with a registered investment advisor or licensed stock broker before investing.

    Information contained in our report will contain “forward looking statements” as defined under Section 27A of the Securities Act of 1933 and Section 21B of the Securities Exchange Act of 1934.  Subscribers are cautioned not to place undue reliance upon these forward looking statements.  These forward looking statements are subject to a number of known and unknown risks and uncertainties outside of our control that could cause actual operations or results to differ materially from those anticipated.  Factors that could affect performance include, but are not limited to, those factors that are discussed in each profiled company’s most recent reports or registration statements filed with the SEC.  You should consider these factors in evaluating the forward looking statements included in the report and not place undue reliance upon such statements.

    We are committed to providing factual information on the companies that are profiled.  However, we do not provide any assurance as to the accuracy or completeness of the information provided, including information regarding a profiled company’s plans or ability to effect any planned or proposed actions.  We have no first-hand knowledge of any profiled company’s operations and therefore cannot comment on their capabilities, intent, resources, nor experience and we make no attempt to do so.  Statistical information, dollar amounts, and market size data was provided by the subject company and related sources which we believe to be reliable.

    To the fullest extent of the law, we will not be liable to any person or entity for the quality, accuracy, completeness, reliability, or timeliness of the information provided in the report, or for any direct, indirect, consequential, incidental, special or punitive damages that may arise out of the use of information we provide to any person or entity (including, but not limited to, lost profits, loss of opportunities, trading losses, and damages that may result from any inaccuracy or incompleteness of this information).

    We encourage you to invest carefully and read investment information available at the websites of the SEC at and FINRA at

    Leave a Reply

    Your email address will not be published. Required fields are marked *