UPDATE: Bank of America Raises Jiayuan PO to $5 After Strong Q4, But Maintains Underperform Rating

In a report published Thursday, Bank of America maintained its Underperform rating on Chinese dating giant Jiayuan.com International Ltd

and increased the company's price objective from $4.80 to $5.00. Bank of America noted, "Although there is mobile disruption for the Internet world, we are encouraged to see that the co generated 30% of its traffic and 15% of its online service revenues from mobile. Unlike online ad which is limited by screen size on mobile and MMORPG games which are demanding on hardware, Jiayuan's business model works relatively better on mobile devices. We believe the mobile channel could be more important than the sales proportion, because some users might charge their accounts on PC (not accounted as mobile sales) but consume on mobile. However, due to higher payment channel fees, mobile business hurts margin by a few ppts. In addition, intensifying competition from peers seeking IPOs and higher tax rates could keep margin under pressure. We raise 2013/14E sales by 8% each after better-than-expected 4Q results, but only increase 2013/14E EPS by 2% and 4% respectively due to margin pressure. Thus we raise our PO to US$5." Jiayuan closed Wednesday at $5.34.