Chinese Web stocks rebound; SEC ends dispute, MS pounds the table


Chinese Internet stocks, crushed over the last few trading days amid SEC-related concerns and a general rout in tech momentum plays, are rebounding sharply today in tandem with other high-beta tech stocks.

Possibly helping: The SEC has settled a dispute with Deloitte over its request for documents related to Longtop Financial, a Deloitte-audited Chinese firm suspected of accounting fraud. The settlement, which comes after the SEC received a "substantial volume" of requested docs, is fueling hopes the SEC's auditing ban on the Chinese arms of the big-4 accounting firms (including Deloitte) will be revoked, and a final resolution between U.S. and Chinese regulators achieved.

Also: Morgan Stanley is calling the selloff a buying opportunity, and has picked five names it's a fan of - Baidu (BIDU +2.8%), YY (YY +14.5%), New Oriental (EDU +2.8%), Dangdang (DANG +6.8%), and Ctrip (CTRP +5.2%)..

MS expects Baidu's margins (recently pressured by huge investments) to stabilize later this year with the help of accelerating sales growth; it's pleased with Ctrip's willingness to sacrifice near-term margins for share gains; it think Dangdang's e-commerce strategy is yielding margin improvement and better fulfillment efficiency; and it's a fan of YY's "sticky" user base and monetization potential (less than 2% of users are currently monetized).

Major gainers include Sungy Mobile (GOMO +11.3%), 500.com (WBAI +18.3%), ChinaCache (CCIH +9.8%), Vipshop (VIPS +10%), Bitauto (BITA +9.5%), and Qunar Baidu-controlled (QUNR +8.8%).

From other sites
Comments (1)
  • hyeduk
    , contributor
    Comments (138) | Send Message
     
    nicely orchestrated by WS...good job !!!
    28 Jan 2014, 01:08 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Hub
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs