Goldman Sachs Conviction Buy List: YouKu.com

Jun 16, 2011
J. Webster
Comments Off on Goldman Sachs Conviction Buy List: YouKu.com

Goldman Sachs sees a 104% upside in the stock, with a price target of $55 for YOKU. Yes, that’s a nice double. Are you willing to take the risk? Chinese stocks have been increasingly volatile and risky. And whether or not you trust the financial statements of these companies.

But, seeing how Youku.com is like the Netflix and YouTube and Hulul of China all rolled into one, it might be a bet to take. And, seeing how China has over a billion people and growing, it might not be a bad bet. Furthermore, China economy is not struggling, rather they are trying to slow the epic grow. Seems like Goldman Sachs knows what they’re talking about, and this is a stock you might take a flyer on.

Want to learn more about Youku.com, here’s a brief synopsis from Reuters:

However, and this is a big however, any company that survives on online advertising only, unless you’re say Google, who owns the search market, seems to be in a precarious position.

Youku.com Inc., incorporated on September 20, 2005, is an Internet television company in People’s Republic of China. The Company’s Internet television platform enables consumers to search, view and share video content quickly and easily across multiple devices. As of September 30, 2010, its video content library contained more than 2,200 movie titles, 1,250 television serial drama titles and over 231,000 hours of other professionally produced content, including 194 variety shows. The Company had approximately 203 million monthly visitors from homes and offices in September 2010 and approximately 61 million monthly visitors from Internet cafes in August 2010. It derives substantially all of its revenues from online advertising services.

The majority of the videos on its Website are professionally produced content, such as television serial dramas, movies, variety shows, current events reports and music videos, and the remainder is comprised of user-generated content and in-house productions. Youku.com Inc. licenses video content typically at fixed rates for a specified term. The average term of licenses varies depending on the type of content, with movies and television serial dramas having an average term of approximately 2.5 years and 2 years, respectively. It generally renews its licenses when they expire.

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