Bank of America Merrill Lynch said 00493.HK 's after-tax net profit rose 9 per cent year-on-year in the first quarter, roughly in line with market expectations but better than the bank's expectations. However, the bank believes that the market has limited room for further upward earnings and, after rising 92 per cent in April, its fundamentals cannot support its current price-to-earnings ratio of more than 20 times.

The bank raised Gome's earnings forecast for this year and next by 4 per cent to 7.8 per cent and 8.1 per cent (6.1974, 0.0006, 0.01 per cent), with the target price rising 6 per cent from Rmb1.80 to Rmb1.90. The bank believes that it is too early to conduct an independent assessment of its e-commerce business. Maintain the rating of "outperforming the market".