Oct. 25, 2013, 4:21 PM
- Chinese Internet and solar stocks, many of which have skyrocketed this year, have closed with decent losses after the Shanghai exchange fell for the fourth day in a row amid credit crunch worries, and as NQ Mobile continued to feel the impact of Muddy Waters' fraud allegations.
- Muddy Waters' detailed accusations regarding ghost addresses, a shell company, inflated market share figures, dubious cash balances, and spyware are likely to yield fresh scrutiny of the financial statements provided by Chinese ADRs, and could also affect the reception given to upcoming IPOs (I, II). Investor concerns about the bookkeeping of U.S.-traded Chinese firms had diminished some this year.
- Chinese Internet decliners: VIPS -9.1%. AMAP -6.1%. YY -6%. QIHU -4.8%. PWRD -5.7%. CYOU -4.7%. SINA -3.8%. LONG -3.5%. YOKU -3%.
- Chinese solar decliners: YGE -12.2%. JKS -9.4%. JASO -9%. DQ -7.2%. TSL -6.8%. CSIQ -4.8%. CSUN -4.4%.
Aug. 30, 2013, 10:29 AM
- Today's downturn in Chinese game makers is outpacing a broader tick down in the Chinese tech space (CQQQ -0.2%). Perfect World (PWRD -1.5%), NetEase (NTES -4.7%), and Giant Interactive (GA -2.4%) are falling in sympathy after Shanda Games (GAME) was walloped yesterday following a Q2 beat.
- NetEase is the lame duck, as a downgrade from JPMorgan to Neutral (albeit with a PT hike to $75 from $65) weighs the stock.
Aug. 20, 2013, 3:22 PM
- Shares of Perfect World (PWRD -6.6%) continue the descent they began during AH yesterday. Although the Chinese web/mobile game maker beat Q2 consensus and issued strong Q3 guidance, investors appear to have been left wanting.
- A chief concern is ballooning costs. Cost of revenue grew 37% Y/Y in Q2 while opex grew 18.6% Y/Y. Revenue was up 4.7% in the same period. Marketing expenses were the largest culprit, up 60.1% Y/Y. Pacific Crest noted, "Q3 guidance is strong but spending is expected to remain elevated."
- Morgan Stanley chopped its rating earlier today to Equal Weight from Overweight following Perfect World's Q2 release: "This mainly reflects rich valuation. Perfect World is trading at 10.7x 2014e P/E, vs. 4.6-10.8x for peers." However, the bank raised its PT to $20, reflecting its expectation of strong revenue growth in 2H on the back of "strong reception of new games such as Saint Seiya Online and Swordsman Online."
- Perfect World is up 81.1% YTD, its climb nearly two-fold that of peers.
- Other Chinese game makers: Shanda Games (GAME), NetEase (NTES), Giant Interactive (GA)
Aug. 19, 2013, 5:43 PM
- Perfect World (PWRD) expects Q3 revenue of RMB779M-RMB815M ($127.3M-$133.4M), well above a $116.8M consensus. The company cites expected revenue from newly-launched titles Swordsman Online and Saint Seiya Online.
- It looks as if the good news was priced in. Like many other Chinese Internet stocks, Perfect World has been on a tear in recent months.
- The Q2 beat is attributed to successful launches for Saint Seiya Online (launched in China) and Neverwinter (launched in North America/Europe, Chinese launch upcoming). The company launched numerous Web/mobile titles during the quarter, and is looking to further diversify its pipeline.
- Sales/marketing spend +102% Q/Q to $31.8M thanks to ad/promotional efforts for new games. R&D +5% Y/Y to $32.5M.
- Gross margin was 75.5%, -100 bps Q/Q and -580 bps Y/Y.
- Perfect World's global network (covers both subsidiaries and partners) accounted for over 1/4 of its revenue.
- CC at 9PM ET. Q2 results, PR
Aug. 19, 2013, 1:48 PM
- Chinese Internet stocks are turning in an a very good day, aided by a rally in Shanghai that came in the wake of positive housing data.
- In addition to NetEase (boosted by a China Telecom deal) and real estate play SouFun (previous), winners include AutoNavi (AMAP +13.6%), Qihoo (QIHU +7.5%, adding to Friday's gains), YY (YY +5.7%), Vipshop (VIPS +9.1%), NQ Mobile (NQ +4.2% - SA contributor Treasure Hunter has another positive article), Sina (SINA +2.6% - still basking in its post-earnings glow) and Perfect World (PWRD +2.1%).
- The group has already been performing very well this summer, thanks to good earnings news, short-covering, momentum traders, and optimism the Chinese economy can see a soft landing.
Jul. 29, 2013, 12:35 PM
- Shanda (GAME) is nosediving as investors balk at the price it's paying to acquire affiliates responsible for handling its online game billing and customer service work, among other activities.
- One of the affiliates (Shengzhan) owns valuable data about user activity. The other (Shengjiang) runs a network that sells 2M+ real/virtual prepaid gaming cards via 180K distribution channels.
- Shanda claims service fees paid to the affiliates made up 21.3% of its Q1 revenue, and that buying the companies will help it deliver the kind of integrated platform it considers crucial for mobile success.
- Shanda is paying for the deals with cash, deferred payments, and the settlement of an outstanding loan receivable.
- Shares had more than doubled since early May before today's plunge.
- Fellow online game providers NetEase (NTES -2.6%), Qihoo (QIHU -4.1%), Perfect World (PWRD -5.3%), and Giant Interactive (GA -5%) are selling off. Sohu and subsidiary Changyou's disappointing Q2 results and Q3 guidance are the main trigger, though a moderate selloff in Shanghai isn't helping either.
Jul. 29, 2013, 8:31 AM
- Shanda Games (GAME) -7% premarket after agreeing to acquire affiliates providing user and payment platform services from its parent company Shanda Interactive Entertainment for a combined $811.5M.
- GAME says the moves will strengthen its mobile strategy.
- Other players in Chinese gaming: SOHU, RENN, NTES, PWRD, GA.
Jul. 16, 2013, 9:42 AMA roundup of tech analyst ratings changes: 1) Baidu (BIDU +4.7%) has been upgraded to Neutral by Citi following the 91 Wireless deal. 2) Sonus (SONS +4.7%) has been upgraded to Buy by Lazard. 3) Stamps.com (STMP -7.7%) has been cut to Neutral by B. Riley. 4) Move (MOVE +2.9%) has been started at Overweight by Stephens. 5) Cavium (CAVM -2%) has been started at Reduce by Nomura. 6) Perfect World (PWRD +1.8%) has been upgraded to Buy by Citi. 7) Trina (TSL -0.5%) has been cut to Underperform by Raymond James; shares would be faring worse if not for ReneSola's guidance hike. | Jul. 16, 2013, 9:42 AM
Jul. 3, 2013, 2:30 PM
Jun. 24, 2013, 1:23 PM
Chinese Internet and solar stocks fall hard after growing banking sector liquidity worries contribute to a 5.3% drop for the Shanghai Composite. Notable decliners: YY -13%. DANG -9%. GA -8.9%. PWRD -7.2%. YOKU -6.6%. SOHU -5.8%. NQ -5.6%. CSIQ -8.4%. TSL -8.3%. LDK -7.5%. JKS -6.9%. JASO -6.9%. DQ -7.1%. SOL -6.7%. Meanwhile, Bloomberg observes many Chinese solar firms, including Trina, JinkoSolar, and Canadian Solar, are moving production overseas to counter EU import tariffs.| Jun. 24, 2013, 1:23 PM
May 29, 2013, 12:45 PM
May 28, 2013, 7:14 PM
More on Perfect World: Q1 revenue was $100.6M (-13% Y/Y), beating consensus by $2.8M. Q2 guidance is for revenue of RMB656M-RMB687M ($105.6M-$110.6M), above a consensus of $102.5M. Online game revenue (89% of total) -16% Y/Y (share loss to Tencent and NetEase); average concurrent game users fell 11% Q/Q and 31% Y/Y to 554K. Gross margin was 76.5%, -40 bps Q/Q and -580 bps Y/Y. Opex -3% Y/Y. PWRD +3.9% AH, CC at 9PM ET (webcast). (PR)| May 28, 2013, 7:14 PM | 1 Comment
May 28, 2013, 6:11 PMPerfect World (PWRD): Q1 EPS of $0.49 beats by $0.02. Shares +3.1% AH. (PR) | May 28, 2013, 6:11 PM
May 20, 2013, 10:15 AM
May 8, 2013, 1:10 PM
A recent Chinese government proposal to allow local investors to buy stocks traded elsewhere could give a lift to "companies familiar to them," argues Stifel. The firm mentions Baidu (BIDU +3.3%), Qihoo (QIHU +2.1%), Youku (YOKU +1.2%), and Tencent (TCEHY.PK - trades in HK) as beneficiaries. All 3 U.S.-traded names are rallying, as are YY (YY +8.9%), Sohu (SOHU +5.1%), Perfect World (PWRD +1.6%), and Changyou (CYOU +3.1%). Youku fell yesterday after Baidu confirmed it's buying video site PPS, and will integrate it with its iQiyi site. Baidu claims PPS/iQiyi will create China's largest Web video platform in terms of mobile users and viewing time.| May 8, 2013, 1:10 PM | 1 Comment
May 6, 2013, 2:30 PM
Chinese Internet stocks are surging after equities rallied in Shanghai and Hong Kong in spite of a major drop in China's services PMI. In addition to Qihoo (previous), winners include Renren (RENN +12.2%), YY (YY +13.3%), Baidu (BIDU +3.8%), Sina (SINA +2.8%), Sohu (SOHU +3.4%), Changyou (CYOU +4.3%), and Perfect World (PWRD +5%). YY is now up 20% since posting a strong Q1 report on Thursday afternoon; revenue rose 130.5% Y/Y to RMB315M ($50.7M), and EPS of $0.23 beat consensus by $0.06. Revenue is expected to hit RMB330M-340M in Q2.| May 6, 2013, 2:30 PM