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Goldman Sachs raised EJ target from $26 to $29 18-Nov-09 01:31 pm I copied and pasted from the Goldman report:

November 18, 2009
EARNINGS REVIEW
E-House (China) Holdings Limited (EJ)
Buy
Above expectations: Significant volume and margin expansion
What surprised us
E-House reported 3Q09 results with net income up 80% qoq to US$35mn,
driving 9M09 net profit to US$61mn, or 96% of our full-year estimate. EHouse’s
3Q09 results came with the following surprises: (1) Stronger-thanexpected
primary agency volume growth in 9M09, up 189% yoy,
stemming from a higher-than-expected sales rate (80% vs. our estimate of
70%). (2) Flat 3Q commission rate (1.40% vs. our estimate of 1.55%) due to
the dilution effect during rapid volume growth. (3) Margin expansion
attributable to cost efficiency improvements. 9M09 net margin at 34% was
7ppt above our full-year estimate of 27%. The company also guided strong
4Q09 revenue of US$103mn-US$106mn, implying full-year guidance of
US$285mn-US$288mn, or 84%-86% yoy growth, which is 18% above our
previous estimate. Meanwhile, E-House expects GFA 21.4mn sqm to become
available for sale (22% above our previous estimate of GFA 17.5mn sqm)
next year having already locked in 15mn sqm by October.
What to do with the stock
We revise up our 2009E-2011E non-GAAP EPS estimates by 45%/8%/1% to
reflect stronger-than-expected volume growth and to incorporate CRIC’s
merger with China Online Housing Technology. We keep our target price P/E
multiple unchanged at 24X, but raise our 12-month target price by 8% to
US$29.84 from US$27.65 based on 2010E non-GAAP EPS of US$1.24. We maintain our Buy rating on the stock.