UPDATE: Goldman Sachs Reinstates Coverage on Youku Tudou with Buy Rating, $23 PT

In a report published Monday, Goldman Sachs Group reinstated its coverage on Youku Tudou YOKU with a Buy rating and $23.00 price target. Goldman Sachs noted, “We have removed the NR designation on Youku Tudou and added the company to our Buy List with a 12m DCF-based TP of US$23, implying 17% upside. The rise in consumers' online viewing habits has established Youku Tudou as China's fastest-growing advertising platform, with further upside likely from the introduction of pre-roll and on monetization of mobile platforms. We believe the recent merger has attained its principal objective and partially rationalized the industry structure, hence reducing content bidding and bandwidth inefficiency. That said, the online video industry is still in its early stages, whereby scale drives long-term sustainability and success of this business model.” Youku Tudou closed on Friday at $19.72.
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