Jumei International Holding Ltd (ADR) (NYSE:JMEI), China’s leading online retailer of beauty products, today announced that it has agreed to provide BabyTree with a convertible loan and a revolving credit facility of up to RMB1.55 billion (US$250 million). The principal of the convertible loan portion of the transaction could reach as high as RMB744 million (US$120 million) depending on the working capital needs of BabyTree and certain operating performance criteria being met. The loan will be convertible into a minority interest in BabyTree based on a pre-agreed formula. The revolving credit facility will be RMB806 million (US$130 million), and drawdown by BabyTree will also depend on the working capital needs of BabyTree and certain operating performance criteria being met.
According to BabyTree, BabyTree is the largest online parenting community in China, and is among the largest online parenting communities globally as ranked by traffic volume. Currently the DAU (daily active users) of BabyTree has surpassed 10 million. BabyTree.com, the website of the company, along with its mobile apps “BabyTree Pregnancy” and “BabyTree Footprints,” cover over 80% of pregnancy-stage parents and parents of 0-6 year-old children in China. The “BabyTree Pregnancy” app ranks number one among baby and maternity mobile apps in China.
Mr. Leo Ou Chen, founder and CEO of Jumei, stated, “This strategic deal with BabyTree will strengthen our ability to create greater value in an important demographic. We believe this market has vast growth potential. Leveraging the enormous user base of BabyTree and Jumei’s supply chain and logistics expertise in cross border ecommerce, we are confident to become the dominant female ecommerce platform in China. We see significant cross-selling potentials across all Jumei product categories.”
Mr. Allen Huainan Wang, CEO of BabyTree, commented, “The funds from this transaction will be used to develop BabyTree’s businesses, especially our e-commerce segment. Teaming up with Jumei will be a very beneficial partnership for us, and we believe it will allow BabyTree’s e-commerce business to rapidly grow to become number one in the baby and maternity sector. We believe the cooperation will help us bring about significant changes in the online retail industry of parenting products.” (Original Source)
Shares of Jumei International Holding closed yesterday at $19.42. JMEI has a 1-year high of $39.45 and a 1-year low of $12.11. The stock’s 50-day moving average is $21.46 and its 200-day moving average is $18.21.
On the ratings front, Jumei has been the subject of a number of recent research reports. In a report issued on June 30, HSBC analyst Chi Tsang upgraded JMEI to Buy. Separately, on May 28, Oppenheimer’s Jason Helfstein maintained a Buy rating on the stock and has a price target of $25.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Chi Tsang and Jason Helfstein have a total average return of 18.0% and 11.7% respectively. Tsang has a success rate of 57.1% and is ranked #626 out of 3711 analysts, while Helfstein has a success rate of 52.9% and is ranked #273.
Overall, 2 research analysts have assigned a Hold rating and 3 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $25.00 which is 28.7% above where the stock closed yesterday.
Jumei International Holding Ltd is an online retailer of beauty products. The product category includes cosmetics, skin care, cosmetic applicators, fragrance and body care.