Chinese online classifieds company Inc (NYSE:WUBA) had its first earnings call as a listed company today, following a 92% rally since its IPO, and while the current valuation may be somewhat high the company is aiming for aggressive expansion. Revenues were up 77.6% year on year, almost entirely driven by the increase in companies paying subscription fees to list their products (a 73% increase), but the recent introduction of real-time bidding (RTB) gives the company a lot of potential upside, and its market share in China’s online retail space has been steadily growing.’s growing market

“We think China’s local services market is at the dawn of online budget migration. The awareness of local merchants in various verticals to do marketing and business online is rising,” write Credit Suisse Group AG (ADR) (NYSE:CS) analysts Dick Wei and Evan Zhou. They note that Inc (NYSE:WUBA) is gaining an increasing percentage of a growing market, and they initiate coverage with a Neutral rating because the stock has already had such a strong start that a lot of the expected growth is already priced in.

“We continue to see rapid mobile traffic growth from both our mobile apps in the broader based platform,” said Inc (NYSE:WUBA) chairman and CEO Jinbo Yao. “The rapid conversion from feature phone to smartphone is driving mobile traffic growth. Our mobile platform delivers superior user experience because the local and the mobile concept of our business naturally matched together.” aims to improve monetization

He said that one of the main goals of the company is to improve monetization over the next year by increasing the efficiency of the sales team and customer sales service team, and reframing online marketing services. Wei and Zhou think that this is the right approach to build on the company’s existing platform.

“ Inc (NYSE:WUBA)’s massive traffic base has room for further monetization. Currently, the majority of the revenue comes from membership subscription,” they write. Of the 4.3 million merchants using the site, about 300,000 are paying for premium services, which is around 7%. They think can get that up to 15% by the end of 2015.  “Furthermore, given’s strong relationship with members (thanks to its large sales force), can further monetise its traffic via performance advertising format: RTB and priority listing.”