Goldman Sachs VeryCD download service termination benefit on Youku

 Goldman Sachs Investment Report released today, said, VeryCD will terminate the download business Youku (NYSE: YOKU) benefit, which still remains on the excellent cool $ 37 price target, and

The following is the summary report:

change

VeryCD founder announced on January 21, the site will no longer offer movies, TV shows and music download service Xinhua News Agency and other local media speculated that this may result from regulatory issues. VeryCD is a well-known index of sites that can help users find eMule download resources for this reason, the site has become an excellent alternative to cool. Currently, VeryCD still allow users to watch streaming media content from PPLive, which claim to offer copyrighted content. According to the Alexa Internet traffic data from monitoring bodies, VeryCD in China, the popularity of the site ranked 65, behind No. 10, Youku, but ahead of PPLive (66), future worries (68), excellent Amazon Johnson (75) and Dangdang (76).

meaning

If confirmed, this event as we have good news Youku. Many investors are questioning, Youku ad-supported streaming video service will be affected by the download site, which allows users to video content stored on your computer, and there may be no charge. EMule questions reflected the copyright regulators will take more stringent measures.

valuation

we Youku 12-month target price is 37 dollars, the assumption that: Youku revenue from the possibility of other sites was 50% (in accordance with the basic information calculated value of 22 U.S. dollars), from the larger TV advertising market is also the possibility of revenue 50% (calculated in accordance with the situation better, worth 53 dollars).

key risk

risks, including content costs hurt profit margins, and regulatory policy changes.