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Feb. 18, 2014, 4:03 PM
- On a good day for many tech momentum plays, solar and Chinese Internet stocks led the way.
- Solar names could be benefiting from Chinese government remarks suggesting Beijing remains open to trade talks to end its ongoing solar import dispute with the U.S. The comments come after the ITC added Chinese solar panels made with Taiwanese cells to its list of Chinese panels covered by import duties.
- Also: SunEdison (SUNE +6.6%) has filed for an IPO for its solar project business, a move that could entice other companies with major solar project ops to do the same.
- Solar gainers: FSLR +6.9%. SCTY +8%. JASO +12.6%. DQ +9.2%. CSUN +8.1%. YGE +5.5%. JKS +5.3%.
- Chinese Web gainers: CTRP +11.5%. CCIH +16.8%. RENN +11%. YOKU +6.1%. QIHU +6.9%. WUBA +10.6%. WBAI +7.9%. GOMO +9.1%. SOHU +5.6%.
- Solar ETFs: KWT, TAN
Feb. 11, 2014, 9:49 AM
- Alcatel-Lucent (ALU -3.7%) has been cut to Equal Weight by Morgan Stanley four days after rallying in response to its Q4 report.
- CenturyLink (CTL +2.2%) has been upgraded to Outperform by Macquarie ahead of tomorrow's Q4 report.
- Sohu (SOHU -4.8%) has been cut to Underweight by Morgan Stanley a day after the company and subsidiary Changyou posted mixed Q4 results and offered weak Q1 guidance.
- Finisar (FNSR +3.9%) has been upgraded to Buy by Jefferies. Rivals JDS Uniphase and Oclaro have delivered market-pleasing earnings reports in recent weeks.
- Allscripts (MDRX +2.3%) has been upgraded to Buy by Maxim. Q4 results are due on Feb. 20.
- Xilinx (XLNX +1.6%) has been started at Buy by MKM.
Feb. 10, 2014, 10:25 AM
- For the second straight quarter (previous), Sohu (SOHU -3.6%) and subsidiary Changyou (CYOU -12.5%) are falling after posting mixed results and issuing light guidance.
- Sohu expects Q1 revenue of $355M-$367M and EPS of -$1.10 to -$1.20, below a consensus of $378.6M and breakeven. Changyou expects Q1 revenue of $174M-$180M and EPS of -$0.30 to -$0.42, below a consensus of $198.8M and $1.00.
- Along with its Q4 report, Changyou has announced CFO Alex Ho is leaving to "start his own business." Finance director Erin Sheng will serve as interim CFO while the game developer searches for a permanent replacement.
- Changyou, responsible for over half of Sohu's Q4 revenue, attributes its guidance to a revenue drop for flagship title TLBB, seasonal ad weakness, and bigger marketing and personnel investments. Changyou also says it's implementing an employee profit-sharing plan tied to specific projects.
- Though its revenue rose 9% Y/Y, Changyou's monthly active accounts fell 19% Q/Q and 34% Y/Y to 25M, thanks to declining accounts for TLBB and DDTank. Platform channel accounts rose 51% Q/Q and 93% Y/Y to 149M.
- Changyou's opex soared 82% Q/Q and 156% Y/Y. Gross margin was 82%, -200 bps Q/Q and Y/Y.
- Sohu's Sogou search revenue rose 23% Q/Q and 72% Y/Y to $70M. Brand ad sales fell 1% Q/Q but rose 50% Y/Y to $123M.
- Sohu's opex rose 78% Y/Y, well above rev. growth of 29%. Gross margin fell 200 bps Q/Q and 500 bps Y/Y to 64%.
- Q4 results: Sohu, Changyou. PRs: Sohu, Changyou.
Feb. 10, 2014, 9:11 AM
Feb. 10, 2014, 5:50 AM
- Sohu.com Inc. (SOHU): Q4 EPS of $0.12 beats by $0.48.
- Revenue of $385M (+28.6% Y/Y) misses by $1.75M.
Feb. 10, 2014, 12:05 AM
Feb. 9, 2014, 5:30 PM
Jan. 27, 2014, 12:44 PM
- U.S. and Chinese Internet stocks are adding to last week's big losses, as investors continue taking profits following major 2013 gains. Chinese stocks were hit last week by an emerging markets selloff, weak PMI data, and an SEC ban (pending appeal) on audits from the Chinese units of big-4 U.S. accounting firms.
- Twitter (TWTR -8.2%), the company bears are most likely to point to when arguing a new Internet stock bubble has formed, is headlining the U.S. decliners. Shares are still up 25% from their post-IPO opening trade of $45.10.
- Other U.S. decliners: GOOG -3.1%. FB -2.9%. YELP -5.3%. Z -5.1%. LNKD -4.3%. P -3.2%. ANGI -4.1%. ZNGA -3.1%. GRPN -3.1%.
- Chinese decliners: BIDU -2.9%. CCIH -19%. BITA -14.6%. CTRP -7.4%. NQ -7.9%. LONG -9.4%. DANG -7.3%. SOHU -4.3%. GOMO -5.8%. SINA -3.3%. QUNR -7.7%. SFUN -5.4%. WBAI -7.5%. RENN -5%.
- Internet/social media ETFs: FDN, PNQI, SOCL
Jan. 23, 2014, 9:59 AM
- SEC administrative law judge Cameron Elliot has barred the Chinese units of the Big-4 accounting firms - KPMG, Deloitte, PwC, and Ernst & Young - from auditing U.S.-listed companies for six months.
- Elliot declares the accounting firms "willfully" chose to withhold audit work papers from U.S. regulators for Chinese companies being investigated for accounted fraud. The firms have been worried about violating Chinese privacy laws by turning over the papers, and have argued the dispute needs to be resolved politically.
- Though the firms plan to appeal and say they can continue serving Chinese clients for now, shares of Chinese Web and solar names aren't handling the news well. Soft Chinese PMI data could be worsening matters.
- Chinese Web decliners: BIDU -2.5%. SOHU -3.2%. DANG -8.9%. SFUN -8.5%. PWRD -8.5%. QUNR -7.1%. LITB -6.5%. YY -6.1%. WUBA -6%. BITA -5.4%. EJ -5.9%. SINA -4.6%. LITB -6.5%. CTRP -5.4%. NQ -7.1%.
- Chinese solar decliners: TSL -8.7%. JASO -6.9%. SOL -6.3%. JKS -5.6%. CSIQ -5.4%. DQ -4.6%. YGE -5.6%. CSUN -6.2%. HSOL -7.8%.
- Qihoo (QIHU -4.6%) has joined the selloff in spite of a BrightWire report stating Alibaba (ABABA) has reached a deal to acquire a stake in the company. Marbridge Consulting reported two weeks ago Qihoo and Alibaba were in talks about a possible investment.
Jan. 2, 2014, 10:44 AM
- Saturday Night Live (CMCSA) has made its debut on Chinese video site Sohu.com (SOHU +0.5%).
- The development marks another important step in attempting to spur more Chinese audiences to watch content through legitimate channels, instead of through piracy.
- What to watch: If significant progress is continued to be made in China with copyright protection and government interference is held in check, the market for broadcasters (DIS, AMCX, VIAB, FOXA, CBS) could explode as younger viewers in China lap up quality U.S.-produced shows.
- "It's fashionable to be a fan of American culture -- they [Chinese viewers] feel dignified, a person with class," notes Sohu.com CEO Charles Zhang on the trend.
Dec. 10, 2013, 12:49 PM
- Pac Crest (Outperform) says its Chinese checks indicate Baidu's (BIDU +3.9%) Q4 trends are stable, at the company's growth rate can match that of the Chinese search market going forward.
- Though shares have risen sharply this year thanks to improved ad monetization (particularly on mobile) and a general rally in Chinese Internet stocks, concerns about search share losses to Qihoo (QIHU +1.4%) and (to a lesser extent) Sohu's (SOHU +2%) Sogou unit have persisted.
- Research firm CNZZ estimates Baidu had a 61.7% Chinese search share in October, down from 73.5% a year earlier. Over the same time, Qihoo's share surged to 21.4% from 9.8%, and Sogou's rose to 10.5% from 7.5%.
Nov. 26, 2013, 1:33 PM
- Citi, Goldman, Macquarie, Jefferies, and Maxim have raised their Qihoo (QIHU +6.4%) PTs following the company's Q3 report (I, II). That's helping shares recoup a big chunk of yesterday's post-earnings losses; they're now only down 3% from Friday's close.
- Citi (Buy, $87 PT) has lifted its 2013-2015 EPS estimates by 7%-16% in response to Qihoo's Q3 beat and solid Q4 guidance. Macquarie (Outperform, $118 PT) praises Qihoo's search and mobile momentum: The firm estimates search revenue rose 87% Q/Q and made up 15% of total revenue, and that mobile revenue rose 67% Q/Q and made up 13% of total revenue.
- Goldman (Neutral, $79 PT) notes management stated on the CC (transcript) Qihoo's Chinese search share is up to 22%, and estimates its share is now 700-800 bps above that of Sohu's (SOHU +2.9%) Sogou unit.
- At the same time, with Qihoo estimating it only has a 1% search revenue share - Goldman thinks Sogou's search revenue remains 2x larger - the firm sees plenty of room to improve monetization. However, it cautions the investments needed to so are likely to depress near-term margins.
- Separately, a source tells Marbridge Consulting Qihoo plans to separate the management of its mobile gaming ops from that of its Android app store business. The source adds Qihoo's mobile gaming revenue now exceeds its PC browser gaming revenue.
Nov. 21, 2013, 1:06 PM
- Sohu's (SOHU +0.8%) Changyou (CYOU -0.8%) online gaming subsidiary is buying a 62.5% stake in a company that owns Raidcall, developer of a popular online gaming group chat app, for $50M in cash. (PR)
- Raidcall has 20M+ registered users, and offers its software in 14 different languages. Changyou asserts the deal allows it to offer gamers "a more comprehensive selection of products," and aids its efforts to evolve into an online gaming platform (as compared with being a mere game developer).
- The deal comes less than a month after Changyou shares were clobbered due to weak Q4 EPS guidance attributed to heavy sales/marketing investments.
Nov. 13, 2013, 3:49 PM
- Six days after dropping in the face of Twitter's strong debut, high-flying Internet names are rallying in the wake of Chinese microblogging leader Sina's Q3 beat and strong Q4 guidance.
- The day has also seen a dismal IPO from online textbook rental leader Chegg, a WSJ report of a rejected $3B+ Facebook offer for Snapchat, and a vague afternoon rumor about M&A interest in Trulia from Realogy.
- U.S. standouts: ZNGA +7.4%. LNKD +4.8%. P +3.3%. ANGI +2.6%. GSVC +4.1% (owns a Chegg stake).
- Chinese standouts: QIHU +8.9%. SFUN +7.5%. LITB +6.4%. YY +6.9%. CYOU +6.3%. QUNR +5.7%. CTRP +3.7%.
- Baidu (BIDU +1.4%) is up moderately following news Chinese online video rivals Sohu (SOHU +1.7%) and Youku (YOKU +3%) have joined the MPAA and various entertainment/media companies in suing it for piracy. The assorted parties accuse Baidu of enabling piracy through its video search engine, as well as through video player apps and a TV dongle.
- The suit comes as Baidu ramps its content spending for its iQiyi and PPS video sites.
Oct. 28, 2013, 12:46 PM
Oct. 28, 2013, 9:30 AM
- SOHU is guiding for Q4 revenue of $378M-$390M and EPS of $0.30-$0.35; the former is above a $369.9M consensus, but the latter is below a consensus of $0.48.
- No explanation for the guidance is given, but at least some of the blame lies with Sohu's Changyou subsidiary. Changyou shares are down 17.3% premarket after the online gaming firm guided for Q4 revenue of $193M-$199M and EPS of $0.34-$0.41 vs. a consensus of $190.3M and $1.39; the EPS shortfall is due to a major Q4 ramp in marketing spend.
- Also, Changyou saw a 14% Q/Q and 21% Y/Y drop in gaming monthly active users thanks to a drop in active accounts for its popular Tian Long Ba Bu MMO game before the launch of a new expansion pack.
- Sohu's online ad sales (48% of revenue) rose 21% Q/Q and 56% Y/Y in Q3; the Y/Y pace is faster than Q2's 49% clip. A 60% Y/Y increase in brand ad sales (driven by Sohu's online video and real estate ops) was largely responsible.
- Online game revenue (Changyou, 44% of revenue) fell 4% Q/Q and rose 7% Y/Y. The Y/Y clip represents a slowdown from Q2's 24%. The Sogou search unit, which Tencent will soon own a major stake in, saw revenue grow 48% Y/Y in Q3 vs. 61% in Q2.
- Sohu's gross margin was 66%, flat Q/Q and Y/Y. Opex rose 19% Q/Q and 53% Y/Y (exceeding rev. growth of 29%).
- Shares have priced in some good news this year.
- Q3 results, PR
Sohu.com Inc is a Chinese online media, search, gaming, community and mobile service group providing comprehensive online products and services on PCs and mobile devices in the People's Republic of China.
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