Boston, MA 04/17/2014 (wallstreetpr) – E Commerce China Dangdang Inc (ADR) (NYSE:DANG) shares have gained considerable ground since talks about sale of fake cosmetic products toned down. The company was among the major online retailers that were mentioned in a media report as selling fake beauty and personal care products. The company was mentioned alongside Amazon.com Inc (NASDAQ:AMZN) that went ahead to close some third-party stores that were adversely mentioned in the CCTV report.
Shares of DANG suffered on the news as the report impacted its reputation as a business. However, clarification by the company’s officials over the alleged sale of counterfeit cosmetic products helped to restore investor and customer confidence in the company. Nonetheless, the issue about trading in fake products was never going to be a long-term headache for the company as its dealing in cosmetic products is very small compared with books and other items.
Vibrant online business
E Commerce China Dangdang Inc (ADR) (NYSE:DANG) benefits from the vibrant online business environment in China. Many Chinese consumers are turning online for purchases, and this is fueling business for e-commerce companies operating business-to-customer platforms. Online transactions offer convenience and competitive prices that attract many Chinese consumers and the industry continues to grow.
As a company, DANG operates diversified online stores that enable it to generate good revenue growth. The company’s cost-cutting measures are also paying off, and analysts have noticed that the future bears many promises for the company if it continues to curb costs and expand revenue.
E Commerce China Dangdang Inc (ADR) (NYSE:DANG) has witnessed several positive full-year earnings estimate revisions compared to no negative revision over the same period. On that note, its consensus EPS estimate has increased from $0.04 to more than $0.09 over the past month. The increasing optimism on the stock has also helped shares up more than 41 percent over the past one month and analysts believe that there is more room for the shares to rise further especially as positive EPS revisions on the stock keep coming.