August 21, 2016
NYSE: BITA
BITAUTO HOLDINGS LTD -ADR
BUY
A+
A
A-
HOLD
B+
B
Annual Dividend Rate
NA
B-
C+
C
Annual Dividend Yield
NA
SELL
C-
D
D-
Beta
2.47
Sector: Technology
BITA BUSINESS DESCRIPTION
Bitauto Holdings Limited provides Internet content
and marketing services for the automotive industry
in the People's Republic of China. The company
operates in three segments: Advertising Business,
EP Platform Business, and Digital Marketing
Solutions Business.
D+
E+
E
E-
HOLD
F
Market Capitalization
$1.6 Billion
52-Week Range
$16.09-$37.31
Sub-Industry: Internet Software & Services
Weekly Price: (US$)
SMA (50)
RATING SINCE
08/18/2015
Price as of 8/18/2016
$27.12
Source: S&P
SMA (100)
1 Year
2 Years
100
90
80
70
60
50
STOCK PERFORMANCE (%)
3 Mo.
Price Change
45.72
1 Yr.
-3.60
3 Yr (Ann)
28.24
12 Mo.
48.96
-210.61
-182.38
3 Yr CAGR
55.31
NA
NA
40
30
20
GROWTH (%)
Last Qtr
48.53
-2,051.28
-1,300.00
Revenues
Net Income
EPS
RETURN ON EQUITY (%)
BITA
Q1 2016
NA
Q1 2015
8.03
Q1 2014
17.34
Ind Avg
14.12
12.76
14.87
S&P 500
11.83
13.71
14.43
n/m
36.87
25.30
BITA
Ind Avg
S&P 500
Volume in Millions
20
10
2014
2015
0
2016
COMPUSTAT for Price and Volume, TheStreet Ratings, Inc. for Rating History
Q1 -0.28
2015
HIGHLIGHTS
The revenue growth came in higher than the industry average of 24.0%. Since the same quarter one year
prior, revenues rose by 48.5%. This growth in revenue does not appear to have trickled down to the
company's bottom line, displayed by a decline in earnings per share.
BITAUTO HOLDINGS LTD -ADR has experienced a steep decline in earnings per share in the most recent
quarter in comparison to its performance from the same quarter a year ago. The company has reported a
trend of declining earnings per share over the past two years. However, the consensus estimate suggests
that this trend should reverse in the coming year. During the past fiscal year, BITAUTO HOLDINGS LTD -ADR
swung to a loss, reporting -$1.05 versus $1.75 in the prior year. This year, the market expects an improvement
in earnings ($6.24 versus -$1.05).
Q4 -0.63
Q3 -0.24
Q1 -0.02
Q2 -0.16
Q4 0.51
Q3 0.68
Q1 0.14
HOLD
The gross profit margin for BITAUTO HOLDINGS LTD -ADR is rather high; currently it is at 67.47%. Regardless
of BITA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed
results of the gross profit margin, BITA's net profit margin of -9.98% significantly underperformed when
compared to the industry average.
EPS ANALYSIS¹ ($)
Q2 0.42
BUY
RECOMMENDATION
We rate BITAUTO HOLDINGS LTD -ADR (BITA) a HOLD. The primary factors that have impacted our rating
are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the
expectation of either a positive or negative performance for this stock relative to most other stocks. The
company's strengths can be seen in multiple areas, such as its robust revenue growth and expanding profit
margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net
income, a generally disappointing performance in the stock itself and feeble growth in the company's
earnings per share.
P/E COMPARISON
2014
10
Rating History
2016
NA = not available NM = not meaningful
1 Compustat fiscal year convention is used for all fundamental
data items.
In its most recent trading session, BITA has closed at a price level that was not very different from its closing
price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. The
fact that the stock is now selling for less than others in its industry in relation to its current earnings is not
reason enough to justify a buy rating at this time.
The company, on the basis of change in net income from the same quarter one year ago, has significantly
underperformed when compared to that of the S&P 500 and the Internet Software & Services industry. The
net income has significantly decreased by 2051.3% when compared to the same quarter one year ago, falling
from -$0.78 million to -$16.78 million.
This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2016. All rights reserved.
Report Date: August 21, 2016
PAGE 1
August 21, 2016
NYSE: BITA
BITAUTO HOLDINGS LTD -ADR
Sector: Technology Internet Software & Services Source: S&P
Annual Dividend Rate
NA
Annual Dividend Yield
NA
PEER GROUP ANALYSIS
Market Capitalization
$1.6 Billion
52-Week Range
$16.09-$37.31
Price as of 8/18/2016
$27.12
INDUSTRY ANALYSIS
REVENUE GROWTH AND EBITDA MARGIN*
120%
The US internet software and services industry includes companies that develop and market internet
software and provide services such as online databases, interactive services, web address registration,
database construction, and website design. The industry is highly competitive and characterized by rapid
technological changes, evolving industry standards, and frequent new product and service developments.
The industry includes about 4,000 companies, with combined annual revenue of approximately $30 billion.
Alphabet (GOOG), eBay (EBAY), and Yahoo (YHOO) are major players.
FA
NEWR
RA
VO
BL
E
STMP
Over the past decade, consumers have embraced the online channel to purchase goods and services. The
number of worldwide consumers becoming more comfortable in using the internet to purchase goods or
services is expected to continue to grow. Increasing online availability of services and declines in broadband
tariffs and associated hardware prices will continue to drive robust growth.
TWOU
ENV
UN
B
RA
VO
EGOV
SOHU
LE
-20%
WBMD
SCOR
FA
Revenue Growth (TTM)
Beta
2.47
-30%
40%
There is an on-going trend toward industry consolidation as leading companies seek access to new
technology and customer bases developed by recent start-ups in order to increase market share. Recent
acquisitions by large and well-capitalized technology companies have altered the competitive landscape.
Profitability of individual companies depends largely on volume and efficient operations and small companies
compete by serving niche segments or by providing technical expertise.
EBITDA Margin (TTM)
Companies with higher EBITDA margins and
revenue growth rates are outperforming companies
with lower EBITDA margins and revenue growth
rates. Companies for this scatter plot have a market
capitalization between $1.5 Billion and $2 Billion.
Companies with NA or NM values do not appear.
*EBITDA – Earnings Before Interest, Taxes, Depreciation and
Amortization.
Looking forward, companies’ success will depend on their ability to adopt rapidly evolving technologies, alter
services to meet industry standards, and improve the performance and reliability of services. Investment in
research and development will continue to be an integral part of company and industry success.
120%
REVENUE GROWTH AND EARNINGS YIELD
PEER GROUP: Internet Software & Services
FA
NEWR
RA
VO
BL
E
STMP
TWOU
B
RA
VO
SCOR EGOV WBMD
LE
-20%
FA
SOHU
YY
ENV
UN
Revenue Growth (TTM)
BITA
SFUN
-6%
The industry is highly competitive, particularly in the advertising segment. This competition has intensified as
a result of consolidation and low entry barriers, which has caused price reductions for advertising space,
implying a drop in margins. Another challenge facing the industry is related to secure transmission of
personal information over public networks. These networks are vulnerable to unauthorized access by
hackers and computer viruses. Allowing unauthorized access to users’ information subjects a company to
reputational, financial, and legal risks.
6%
Earnings Yield (TTM)
Companies that exhibit both a high earnings yield
and high revenue growth are generally more
attractive than companies with low revenue growth
and low earnings yield. Companies for this scatter
plot have revenue growth rates between -2.2% and
100.6%. Companies with NA or NM values do not
appear.
Ticker
BITA
WBMD
YY
NEWR
ENV
TWOU
SCOR
SFUN
STMP
SOHU
EGOV
Recent
Company Name
Price ($)
BITAUTO HOLDINGS LTD -ADR 27.12
WEBMD HEALTH CORP
52.12
YY INC -ADR
50.74
NEW RELIC INC
35.15
ENVESTNET INC
38.82
2U INC
35.13
COMSCORE INC
27.39
SOUFUN HLDGS LTD
4.30
STAMPS.COM INC
87.02
SOHU.COM INC
38.72
NIC INC
22.62
Market
Cap ($M)
1,639
2,032
1,850
1,787
1,662
1,647
1,552
1,524
1,503
1,499
1,492
Price/
Earnings
NM
31.21
19.37
NM
NM
NM
NM
NM
45.32
NM
31.86
Net Sales
TTM ($M)
674.18
670.87
980.61
201.77
495.33
176.90
368.82
964.72
287.40
1,816.28
305.41
Net Income
TTM ($M)
-79.07
74.15
155.20
-70.44
-19.55
-23.35
-6.76
-135.05
34.73
-74.59
47.69
The peer group comparison is based on Major Internet Software & Services companies of comparable size.
This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2016. All rights reserved.
Report Date: August 21, 2016
PAGE 2
August 21, 2016
NYSE: BITA
BITAUTO HOLDINGS LTD -ADR
Sector: Technology Internet Software & Services Source: S&P
Annual Dividend Rate
NA
Annual Dividend Yield
NA
COMPANY DESCRIPTION
Bitauto Holdings Limited provides Internet content and
marketing services for the automotive industry in the
People's Republic of China. The company operates in
three segments: Advertising Business, EP Platform
Business, and Digital Marketing Solutions Business. The
Advertising Business segment provides advertising
services, including new automobile pricing and
promotional information, specifications, reviews, and
consumer feedback to automakers through its
bitauto.com and taoche.com Websites, as well as mobile
applications. The EP Platform Business segment provides
Web-based and mobile-based integrated digital
marketing, customer relationship management (CRM),
and automobile listing services to automobile customers
in China. This segment's platform enables dealer
subscribers to create their own online showrooms, list
pricing and promotional information, provide dealer
contact information, place advertisements, and manage
customer relationships. It also provides automobile
transaction, CRM, and online automotive financial
platform services to automobile customers. The Digital
Marketing Solutions Business segment provides
one-stop digital marketing solutions, such as Website
creation and maintenance, online public relations, online
marketing campaigns, and advertising agent services to
automakers. The company also distributes its dealer
customers' automobile pricing and promotional
information through its partners who provides Internet
services. In addition, it provides customer services and
training to dealer customers. Bitauto Holdings Limited
was founded in 2000 and is headquartered in Beijing, the
People's Republic of China.
BITAUTO HOLDINGS LTD -ADR
New Century Hotel Office Tower, 6th Floor, No. 6 S
Beijing 100044
CYM
Phone: 86 10 6849 234
http://www.bitauto.com
Employees: 5000
Beta
2.47
Market Capitalization
$1.6 Billion
52-Week Range
$16.09-$37.31
Price as of 8/18/2016
$27.12
STOCK-AT-A-GLANCE
Below is a summary of the major fundamental and technical factors we consider when determining our
overall recommendation of BITA shares. It is provided in order to give you a deeper understanding of our
rating methodology as well as to paint a more complete picture of a stock's strengths and weaknesses. It is
important to note, however, that these factors only tell part of the story. To gain an even more comprehensive
understanding of our stance on the stock, these factors must be assessed in combination with the stock’s
valuation. Please refer to our Valuation section on page 5 for further information.
FACTOR
SCORE
2.0
Growth
out of 5 stars
weak
Measures the growth of both the company's income statement and
cash flow. On this factor, BITA has a growth score better than 30% of
the stocks we rate.
strong
2.5
Total Return
out of 5 stars
weak
Measures the historical price movement of the stock. The stock
performance of this company has beaten 40% of the companies we
cover.
strong
2.0
Efficiency
out of 5 stars
weak
Measures the strength and historic growth of a company's return on
invested capital. The company has generated more income per dollar of
capital than 30% of the companies we review.
strong
1.5
Price volatility
out of 5 stars
weak
Measures the volatility of the company's stock price historically. The
stock is less volatile than 20% of the stocks we monitor.
strong
2.0
Solvency
out of 5 stars
weak
Measures the solvency of the company based on several ratios. The
company is more solvent than 30% of the companies we analyze.
strong
0.5
Income
out of 5 stars
weak
Measures dividend yield and payouts to shareholders. This company
pays no dividends.
strong
THESTREET RATINGS RESEARCH METHODOLOGY
TheStreet Ratings' stock model projects a stock's total return potential over a 12-month period including both
price appreciation and dividends. Our Buy, Hold or Sell ratings designate how we expect these stocks to
perform against a general benchmark of the equities market and interest rates. While our model is
quantitative, it utilizes both subjective and objective elements. For instance, subjective elements include
expected equities market returns, future interest rates, implied industry outlook and forecasted company
earnings. Objective elements include volatility of past operating revenues, financial strength, and company
cash flows.
Our model gauges the relationship between risk and reward in several ways, including: the pricing drawdown
as compared to potential profit volatility, i.e.how much one is willing to risk in order to earn profits; the level of
acceptable volatility for highly performing stocks; the current valuation as compared to projected earnings
growth; and the financial strength of the underlying company as compared to its stock's valuation as
compared to projected earnings growth; and the financial strength of the underlying company as compared
to its stock's performance. These and many more derived observations are then combined, ranked, weighted,
and scenario-tested to create a more complete analysis. The result is a systematic and disciplined method of
selecting stocks.
This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2016. All rights reserved.
Report Date: August 21, 2016
PAGE 3
August 21, 2016
NYSE: BITA
BITAUTO HOLDINGS LTD -ADR
Sector: Technology Internet Software & Services Source: S&P
Annual Dividend Rate
NA
Annual Dividend Yield
NA
Consensus EPS Estimates² ($)
IBES consensus estimates are provided by Thomson Financial
Beta
2.47
Market Capitalization
$1.6 Billion
52-Week Range
$16.09-$37.31
Price as of 8/18/2016
$27.12
FINANCIAL ANALYSIS
BITAUTO HOLDINGS LTD -ADR's gross profit margin for the first quarter of its fiscal year 2016 is essentially
unchanged when compared to the same period a year ago. Even though sales increased, the net income has
decreased, representing a decrease to the bottom line.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the
next 12-months. To learn more visit www.TheStreetRatings.com.
1.77
Q3 FY16
6.24 E
12.01 E
2016(E)
2017(E)
INCOME STATEMENT
Net Sales ($mil)
EBITDA ($mil)
EBIT ($mil)
Net Income ($mil)
Q1 FY16
168.04
NA
-13.31
-16.78
Q1 FY15
113.13
NA
-2.76
-0.78
Q1 FY16
576.92
NA
NA
NA
Q1 FY15
936.67
1,399.84
0.00
889.72
Q1 FY16
67.47%
NA
-7.92%
NA
NA
NA
Q1 FY15
68.06%
NA
-2.44%
0.32
5.10%
8.03%
Q1 FY16
NA
NA
NA
NA
Q1 FY15
5.08
0.00
0.24
-11.66
Q1 FY16
62
0.00
-0.28
NA
NA
600,628
Q1 FY15
NA
0.00
-0.02
NA
NA
618,390
BALANCE SHEET
Cash & Equiv. ($mil)
Total Assets ($mil)
Total Debt ($mil)
Equity ($mil)
PROFITABILITY
Gross Profit Margin
EBITDA Margin
Operating Margin
Sales Turnover
Return on Assets
Return on Equity
DEBT
Current Ratio
Debt/Capital
Interest Expense
Interest Coverage
SHARE DATA
Shares outstanding (mil)
Div / share
EPS
Book value / share
Institutional Own %
Avg Daily Volume
2 Sum of quarterly figures may not match annual estimates due to
use of median consensus estimates.
This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2016. All rights reserved.
Report Date: August 21, 2016
PAGE 4
August 21, 2016
NYSE: BITA
BITAUTO HOLDINGS LTD -ADR
Sector: Technology Internet Software & Services Source: S&P
Annual Dividend Rate
NA
Annual Dividend Yield
NA
RATINGS HISTORY
Our rating for BITAUTO HOLDINGS LTD -ADR has
not changed since 8/18/2015. As of 8/18/2016, the
stock was trading at a price of $27.12 which is
27.3% below its 52-week high of $37.31 and 68.6%
above its 52-week low of $16.09.
Beta
2.47
Market Capitalization
$1.6 Billion
HOLD: $28.13
BUY: $82.28
$100
$75
$50
Price/Earnings
1
2
3
4
5
BITA NM
Peers 36.87
• Neutral. The absence of a valid P/E ratio happens
when a stock can not be valued on the basis of a
negative stream of earnings.
• BITA's P/E is negative making this valuation
measure meaningless.
Price/Projected Earnings
2015
MOST RECENT RATINGS CHANGES
Date
Price
Action
8/18/15
$28.13 Downgrade
8/18/14
$82.28 No Change
1
2
3
premium
From
Buy
Buy
To
Hold
Buy
Price reflects the closing price as of the date listed, if available
(as of 8/18/2016)
40.77% Buy - We believe that this stock has the
opportunity to appreciate and produce a total return of
more than 10% over the next 12 months.
30.59% Hold - We do not believe this stock offers
conclusive evidence to warrant the purchase or sale of
shares at this time and that its likelihood of positive total
return is roughly in balance with the risk of loss.
28.63% Sell - We believe that this stock is likely to
decline by more than 10% over the next 12 months, with
the risk involved too great to compensate for any
possible returns.
TheStreet Ratings
14 Wall Street, 15th Floor
New York, NY 10005
www.thestreet.com
Research Contact: 212-321-5381
Sales Contact: 866-321-8726
5
1
2
3
4
5
Price/Sales
1
2
premium
3
4
5
Price to Earnings/Growth
4
5
discount
1
2
3
premium
4
5
discount
BITA NA
Peers 0.22
• Neutral. The PEG ratio is the stock’s P/E divided by
the consensus estimate of long-term earnings
growth. Faster growth can justify higher price
multiples.
• Ratio not available.
Earnings Growth
1
2
3
4
lower
5
higher
BITA -182.38
Peers 36.06
• Lower. Elevated earnings growth rates can lead to
capital appreciation and justify higher
price-to-earnings ratios.
• However, BITA is expected to significantly trail its
peers on the basis of its earnings growth rate.
Sales Growth
discount
BITA 2.48
Peers 8.89
• Discount. In the absence of P/E and P/B multiples,
the price-to-sales ratio can display the value
investors are placing on each dollar of sales.
• BITA is trading at a significant discount to its
industry on this measurement.
3
BITA NA
Peers 23.76
• Neutral. The P/CF ratio is the stock’s price divided
by the sum of the company's cash flow from
operations. It is useful for comparing companies
with different capital requirements or financing
structures.
• Ratio not available.
discount
BITA NA
Peers 5.51
• Neutral. A lower price-to-book ratio makes a stock
more attractive to investors seeking stocks with
lower market values per dollar of equity on the
balance sheet.
• Ratio not available.
2
premium
discount
premium
RATINGS DEFINITIONS &
DISTRIBUTION OF THESTREET RATINGS
4
BITA 2.26
Peers 23.79
• Discount. A lower price-to-projected earnings ratio
than its peers can signify a less expensive stock or
lower future growth expectations.
• BITA is trading at a significant discount to its peers.
Price/Book
1
Price/CashFlow
discount
$25
2014
Price as of 8/18/2016
$27.12
VALUATION
HOLD. This stock’s P/E ratio is negative, making its value useless in the assessment of premium or discount
valuation, only displaying that the company has negative earnings per share. The price-to-sales ratio is well
above the S&P 500 average, but well below the industry average.
premium
2 Year Chart
52-Week Range
$16.09-$37.31
1
2
3
lower
4
5
higher
BITA 48.96
Peers 27.87
• Higher. A sales growth rate that exceeds the
industry implies that a company is gaining market
share.
• BITA has a sales growth rate that significantly
exceeds its peers.
DISCLAIMER:
The opinions and information contained herein have been obtained or derived from sources believed to be reliable, but
TheStreet Ratings cannot guarantee its accuracy and completeness, and that of the opinions based thereon. Data is provided
via the COMPUSTAT® Xpressfeed product from Standard &Poor's, a division of The McGraw-Hill Companies, Inc., as well as
other third-party data providers.
TheStreet Ratings is a division of TheStreet, Inc., which is a publisher. This research report contains opinions and is provided
for informational purposes only. You should not rely solely upon the research herein for purposes of transacting securities or
other investments, and you are encouraged to conduct your own research and due diligence, and to seek the advice of a
qualified securities professional, before you make any investment. None of the information contained in this report constitutes,
or is intended to constitute a recommendation by TheStreet Ratings of any particular security or trading strategy or a
determination by TheStreet Ratings that any security or trading strategy is suitable for any specific person. To the extent any of
the information contained herein may be deemed to be investment advice, such information is impersonal and not tailored to the
investment needs of any specific person. Your use of this report is governed by TheStreet, Inc.'s Terms of Use found at
http://www.thestreet.com/static/about/terms-of-use.html.
This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2016. All rights reserved.
Report Date: August 21, 2016
PAGE 5