UPDATE: Morgan Stanley Upgrades E-Commerce China Dangdang to Overweight, Raises PT on Improving Margins

In a report published Monday, Morgan Stanley analyst Philip Wan upgraded the rating on E-Commerce China Dangdang DANG from Equal-Weight to Overweight, and raised the price target from $5.00 to $6.50. In the report, Wan noted, “Dangdang's margin is recovering, driven by the improving scale for its self-procurement business and better category mappings between its general merchandise services and online marketplace. Continuous execution should lead to margin upside. Upgrade to OW with a PT of US$6.50. Net sales grew 23% YoY to Rmb1.3bn in 1Q, 2-3% better than our estimates and its guidance. Net loss was Rmb73mn, narrowed by 27% YoY and better than our forecast (Rmb111mn loss), thanks to better sales mix and operating leverage.” E-Commerce China Dangdang closed on Friday at $5.71.