UPDATE: Bank of America Initiates Dangdang with Buy on Compelling Valuation, Risk/Reward Upside

In a report published Thursday, Bank of America analyst Binnie Wong initiated coverage on E-Commerce China Dangdang

with a Buy rating and $7.00 price target. In the report, Wong noted, “Dangdang, one of the leading online retailers in China, is our new Buy with a DCF-based PO of US$7.0, implies 40% upside. Reasons: 1) competitive edge as being the largest online book seller offers a core user base for cross-selling; 2) mix shift to high margin marketplace; 3) opportunities emerging from fast-growing general merchandise space. We expect these initiatives drive margin recovery and bring upside to 2013 forecasts, co. is reporting 1Q results on May 16th. See P.26 for eCommerce trends and outlook and cross-country comparison.” E-Commerce China Dangdang closed on Wednesday at $4.94.