UPDATE: Goldman Sachs Upgrades E-House (China) on Move to High-Potential Real Estate E-Commerce Market

In a report published Tuesday, Goldman Sachs analyst Jacqueline Du upgraded the rating on

from Neutral to Buy, and raised the price target from $9.08 to $13.14. In the report, Goldman Sachs noted, “We see potential for a Rmb14 bn real estate e-commerce market in China's 40 major cities (Rmb26 bn nationwide) on an annual basis, vs. Rmb2.0 bn e-commerce revenue for Soufun and E-House in 2013E. We expect E-House's share of this market to grow from 4.3% now to 10.3% by 2016E, implying an e-commerce revenue CAGR of 39% in 2013E-16E, with its online operating margin recovering to 29% in 2016E from 17% in 2013E. To reflect this, we raise our 2014E/15E non-GAAP EPS by 8%/17% and introduce 2016E non-GAAP EPS of US$1.12, +32% yoy. We therefore raise our 12-month target price to US$13.14 from US$9.08 and upgrade E-House to Buy from Neutral.” E-House (China) Holdings Limited closed on Monday at $9.47.