Thursday, 30 October 2014 12:47

Baidu (BIDU) Q3 FY2014 Results

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Baidu Inc. (BIDU; profile) released Q3 FY2014 results which included revenue of 13.5 billion RMB (in line with management guidance) and net income of 3.6 billion RMB. Third quarter revenue was slightly under the 13.55 billion RMB consensus estimate, but Baidu’s earnings of 11 RMB per share beat the 9.8 RMB per share estimate. This quarter’s earnings 11% surprise was the third consecutive beat by the company. One highlight for the quarter was progress on the company’s initiatives in the mobile space. According to management, mobile traffic surpassed desktop during the quarter, and revenues from mobile channels were about 36%…
Tuesday, 28 October 2014 16:08

Eco data - Industrial Profit

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The latest economic data out of China, industrial profits for major companies, echoed a tune similar to other recent data – overall weakening conditions which seem to be intensifying. For the YTD period through September, industrial profits slowed to +7.9% YoY, down sharply from +10.0% for the YTD through August. For the month of September alone, profits were up +0.4% YoY, slightly lower that the +0.6% from last month. Looking at revenues, the picture wasn’t much better. For the YTD period through September, revenue growth slipped to +7.9% YoY vs. +8.3% through August. Statistics for the January-September period show a…
Tuesday, 28 October 2014 14:38

Baidu (BIDU) - what to look for in Q3

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Baidu (BIDU, profile) is set to announce Q3 FY2014 earnings October 29, 2014 after market close. The stock managed to escape the September swoon that hit most other US-listed China stocks, but did dip lower in early October along with the broader market. Baidu has rallied since, to regain trading comfortably over the $200 handle. So what should investors be looking for Wednesday, and what could it mean for the stock? On the revenue side, seeing solid progress in mobile is key; continuation of growth from earlier in the year would bode well for the company’s future competitiveness. Revenue from…
Monday, 27 October 2014 21:29

New Oriental (EDU) bullish, barely, but more to come?

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After a rough Q1, is New Oriental Education (EDU) ready to move higher? Last week’s earnings report was pretty awful, however despite a rough Q1, it seems like there may be some support for the stock, due in part to management’s relatively confident guidance. Was Q1 lackluster revenue growth a…
Monday, 27 October 2014 21:04

Vipshop (VIPS) looking better, but where's the volume?

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Vipshop Holdings (VIPS) is looking good in all areas except our moving average screen. It has room to continue this climb before hitting overbought. The only issue one can see with VIPS is that there hasn’t been a real pickup in volume along with this move.   Current technical rating…
Monday, 27 October 2014 20:51

NetEase (NTES) looking like a strong maybe…

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This should have been issued three days ago, however the day prior saw the stock violating its upper Bollinger band and we expected a correction. The stock barely pulled back within bands on the day it hit our bullish rating as it violated the Bollinger band on that day as…
Monday, 27 October 2014 15:08

Week in review - Oct 24, 2014

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China stocks traded in the US had another week of positive gains, making it two straight weeks of closing higher after slumping through most of September. By Friday, the PowerShares Golden Dragon China ETF had nearly recovered most of its earlier losses and was nearly break-even on a YTD basis. A steady stream of positive earnings reports during the week and positive macroeconomic data pushed main US indexes higher during the week, a tailwind for the risk appetite usually associated with China shares. Although US-market and economic data provided a positive backdrop, recent data focusing on China also helped. A…
Friday, 24 October 2014 16:39

New Oriental Education (EDU) Q1 FY2015 Results

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New Oriental Education (EDU) released Q1 FY2015 results which included revenue of 394 million USD (lower than management’s initial guidance of about 420 million USD) and net income of 112 million USD. Revenue growth during Q1 was a paltry 1% YoY, notably slower than the +20% YoY pace for FY2014. The quarterly results showed the continued impact of headwinds facing the company, which missed both consensus revenue and earnings estimates.   Although the quarter’s results were disappointing, management’s outlook going forward could be cause for optimism. The company’s forecast for Q2 FY2015 revenue was for +15% YoY growth to about…
Friday, 24 October 2014 15:35

Eco data - Residential home prices for September 2014

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China new home prices fell slightly, or in one case remained stagnant, in all major cities across the nation despite the lifting of purchasing restriction in all but four top tier cities. All but one of the 70 major cities surveyed showed prices falling month on month by an average of -1%. The sole exception was the city of Xi’an which showed no change for month on month price changes. Beijing, arguably the most important market and a major source of the government’s concern with rising housing costs, saw prices dip -0.7% MoM, but were still slightly higher than a…
Thursday, 23 October 2014 16:23

Taking a look at the 58.com (WUBA) mobile app

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58.com (WUBA, profile) is China’s popular online marketplace that allows users to post listings of items or services they want to sell and for people to respond to them. As part of its business, 58.com has a fairly easy-to-use and comprehensive mobile application that allows users to buy and sell from almost any location. To help investors understand more about how this app is powering 58.com's business, we took the app for a test drive.   On the app’s homepage users are able to quickly identify what categories they want to search in. 58.com service categories are virtually limitless, everything…
Thursday, 23 October 2014 10:08

Eco data - October Flash PMI increases to 50.4

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The HSBC/Markit Flash China Manufacturing PMI increased vs. September’s final reading of 50.2 (release here). An improvement in the main sub-indexes (output, new orders, exports, and employment) helped push the index higher. Output, new orders, and exports were all pointing to an increase, however were cooler than readings in September. The employment index was still showing contraction, but the index increased sharply from last month’s reading showing a larger degree of contraction.  
Tuesday, 21 October 2014 21:43

Hollysys (HOLI) back to positive

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Hollysys – back to a buy, but is it another head fake? Will Hollysys (HOLI, profile) finally play along and form a trend that lasts longer than a stoplight? We can only hope so; the stock has consistently failed to enter a trend over the past three times when we…
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