WUBA: 58.

Com Inc Stock Analysis

58.com Inc. is an online marketplace serving consumers and merchants and meeting local
demand in China. It is associated with housing retail, recruitment, second hand product, travel,
catering, entertainment and group purchase information. This company is headquartered in
Beijing, China.58.com Inc is operating an online marketplace in PRC. Its online business enables
consumers and traders to connect, share data and do business. This online marketplace comprises
local information in 485 cities in numerous content categories such as jobs, real estate, used
foods, yellow pages and automotive items.Membership services such as merchant certification
and listing benefits as well as display of online storefronts and marketing services comprise
listing, real time bidding and priority listing as well as marketing services through collaboration
with internet companies. Founded in 2005, this company is one of china's largest online market
places.
Analysis of Results
58.com Inc. (NYSE/NYX:WUBA) is China's marketplace company with a difference. Here are
its financial results for the first quarter ending March 31, 2016. Total revenue was US $231.3
million which marks a 165.6 percent increase from the same quarter in the previous year,
exceeding guidance of US $215 million to US $223 million.
Gross margin was 89.5 percent as against 93.1 percent during the same quarter of 2015. Loss
from operating was US $57.8 million in Q1 of 2015. Non GAAP loss from operations was US
$32.8 million as against non-GAAP loss from operations of US $53.1 million in Q1 of 2015. Net
loss attributable was US $82.2 million as against net loss attributable to 58.com Inc of US $52.4
million in Q1, 2015.
Basic and diluted losses for the ADS for ordinary shareholders was US $0.58. One ADS
represents 2 Class A ordinary shares. Non GAAP basic and diluted losses per ADS 3 for
ordinary shareholders was US $0.36. In the company press release, CFO G.
Zhou remarked that "compared with the first quarter of 2015, revenues and subscription based
paying membership accounts continued to grow rapidly, operating and net margins improved and
operating cash flow turned positive." Compared with the Q1 of 2015, revenue and subscription
based paying membership accounts operate rapidly and net margins improve, operating cash
flow turning positive.
58.com's financial results also incorporate results from Anjuke and Ganji which consolidated
with the company in March and August 2015 respectively. Total revenues were US $231.3
million, indicating an increase of 165.6 percent from US $87.1 million in Q!, 2015. Membership

revenues were US $92.3 million marking an increase of 119.3 percent from US $42.1 million in
2015. Increase in membership revenues were driven by increase in paying membership accounts.
Number of paying membership accounts on 58.com during the first quarter of 2016 was around
1034,000 which marks an increase of 54.6 percent from 669,000 in Q1, 2015. Some paying
members purchase membership services from more than one 58.com platform contributing to
revenues of these platforms. Online marketing services revenues were US $129.7 million
marking an increase of 192.8 percent from US $44.3 million in Q1, 2015. Increase was driven by
rising revenues.
Operating expenses equalled US $258 million, indicating an increase of 85.7 percent from US
$138.9 million in Q1, 2015. Increase was the result of rising operating expenses associated with
consolidation of finances. Operating expenses linked to 58.com's core classified business grew to
support enhanced traffic and revenues. Sales and marketing expenses in Q1 of 2016 was US
$201.8 million, an increase of 76.8% from US $114.2 million during Q1, 2015.
Meeting sales and marketing expenses, advertising expenses comprised US $104.8 million and
US $61.9 million during Q1, 2016 and 2015. This marks an increase resulting from
consolidations.
Conclusion
58.com Inc. is therefore a strong BUY and investors are advised to go in for this Chinese firm's
shares if they want stable profits.
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