Monday, 01 September 2014 20:49

Mindray Medical (MR) has the sniffles, looking bearish

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Mindray Medical catches a cold, bearish Our bullish rating a bit more than a week ago now looks like it was premature. Mindray (MR) now looks to continue the 2014 down trend and potentially show us new lows in the coming weeks. Our leading indicator crossed its signal on Aug.…
Monday, 01 September 2014 20:39

Dangdang (DANG) slips to bearish

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Dangdang becomes bearish, but for how long? We want to follow this name closely – Dangdang (DANG, profile) was up as much as 14% after our upgrade to bullish and the recent tail off in volume could mean that this bearish rating is short lived. The story with Dangdang is…
Monday, 01 September 2014 20:29

Guangshen Railways (GSH) pulls into bear country

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Guangshen Railways derails Except our triple moving average juxtapositions, things have gone pear-shaped for Guangshen Railways (GSH, profile). In our last note we mentioned that the stock was looking shaky and sounded some words of caution, if you were paying attention, you’re welcome. The MACD cross more than a week…
Monday, 01 September 2014 20:18

PowerShares Golden China (PGJ) turns bearish

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Golden Dragon losing its shine One of our longest running ratings saw PGJ at bullish from June until now; back then our coverage began premarket on June 10th started with the open that morning of 29.28 The top now looks exhausted with volume tapering since mid August and all of…
Monday, 01 September 2014 14:49

Home prices lower in August, but at a slower pace

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Data from Soufun (SFUN) showed that home prices in China continued to fall since May, however the MoM decline was slightly less than the pace in July. On a YTD basis, prices were still higher vs. a year ago (+3.2%), but had sliced May’s +7.8% YoY prices by more than half. Prices in top-tier cities were largely flat MoM (prices in Beijing were -0.05%, Shanghai -0.33%, Shenzhen -0.19%, Guangzhou -0.82%, all MoM), with some smaller cities showing relatively larger price declines. Consensus seems to suggest that prices in top-tier cities could hold up better than those in lower-tier cities, and…
Monday, 01 September 2014 14:06

China search engine market share - Aug 2014

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Data from CNZZ showed that Baidu (BIDU, profile) continued to lose ground to competitors Qihoo 360 Technology (QIHU, profile) and Sogou (a joint effort between Tencent and Sohu, SOHU, profile).  The fact that Qihoo is gaining share isn’t that much of a surprise when considering media reports released just before Qihoo’s Q2 numbers which highlighted it breaking the 30% share barrier (measured on a daily basis).  Sogou's position seems to slowly becoming relegated toward the bottom of the pile. After breaking into a meaningful share last year, it seems to have hit a plateau in recent months (hovering around the…
Monday, 01 September 2014 10:11

Eco data - August PMI 51.1

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The official manufacturing PMI for August was 51.1 (official release, Chinese), just missing the 51.2 consensus estimate, and down from 51.7 last month. Not surprisingly from the headline index, most of the sub-indexes were also lower on the month, however production and new orders helped buoy the overall index, both showing expansion but at a slower pace vs. July. The decline in the new order index was due in part to new export orders showing a neutral reading (vs. expansion last month), and imports further weakening to a six-month low. The employment situation continued to look bleak, also dropping to…
Saturday, 30 August 2014 15:42

Week in review - Aug 29, 2014

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Trading in US-listed China stocks this past week followed the previous week’s theme, rising early in the week before dropping off as the weekend edged closer. The PowerShares Golden Dragon China ETF ended the week with a loss, however was still sitting on +7.8% gain for the year, which is decent after the 12% drawdown in March-April. Last week’s trading included some earnings stories, as well as July’s final data point on China’s economy was released mid-week. The latter which was something arguably adding to the confusion about the overall direction for the economy. Industrial profit data from this week…
Thursday, 28 August 2014 19:37

Eco data - Industrial Profit for July 2014

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The last, but not least economic data release for July was Industrial profit (source, Chinese), which showed profit growth of +11.7% YoY, the second consecutive month of growth from the reading in May. The reading is cumulative, so on a YTD basis industrial companies in China are reporting a near +12% gain in profits, something which may be equal parts admirable and questionable given recent conflicting data showing a questionable recovery. (Last week’s HSBC/Markit flash China Manufacturing PMI was a shocking 50.3, suggesting that the economy was near the tipping point of contraction.) The data for July showed a +13.5%…
Thursday, 28 August 2014 18:43

China Nepstar (NPD) Q2 FY2014 Results

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China Nepstar (NPD, profile) released Q2 FY2014 earnings results that included continued top-line growth (revenue +7% YoY, +1% QoQ), driven by another quarter of strong same store sales (+6% YoY).  Despite improvements on the top-line and comparable store sales, the company was still in the process of rationalizing its store network, and recognized impairment losses during the quarter which negatively affected operating margins. Although the Q2 loss may have been contrary to what investors were expecting, there were signs that management’s efforts to shift the product mix toward profitability and improve store-level performance were making progress. Along with strong comp…
Thursday, 28 August 2014 17:01

KongZhong (KZ) Q2 FY2014 Results

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KongZhong (KZ, profile) released Q2 FY2014 results which included net revenue of 57.4 million USD and net income of 0.07 million USD. On balance, Q2 results were better than management’s earlier guidance (revenue was in line, but the company previously expected a net loss for the quarter). Strength in the quarter came from the company’s core Mobile and Internet game’s businesses, which both delivered solid YoY and QoQ revenue growth. Operating and net margins were lower than previous quarters, in part due to advertising and promotion expenses related to game launches during Q2, investments fully expensed up front, but which…
Monday, 25 August 2014 13:06

Qihoo 360 (QIHU) Q2 FY2014 Results

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Qihoo 360 Technology (QIHU, profile) released Q2 FY2014 results which included revenue of 317.9 million USD (exceeding management’s earlier guidance) and net income of 37.0 million USD. The Q2 results beat the consensus revenue estimate of about 309 million USD and also beat on earnings (non-GAAP EPADS of 0.50 USD vs. 0.46 consensus). In addition to Q2 results, the company offered a strong Q3 outlook. Management’s Q3 FY2014 revenue guidance was for about 363 million USD (higher than the 357 million USD consensus), reflecting growth of about +93% YoY and +14% QoQ. Along with a quarter of strong top-line growth,…
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