Mon, Oct. 26, 12:27 PM
- Beaten-down SOHU and Changyou (NASDAQ:CYOU) have surged after delivering Q3 beats and issuing soft Q4 guidance.
- Sohu expects Q4 revenue of $435M-$465M and EPS of -$0.40 to -$0.65 vs. a consensus of $515.3M and -$0.42. Majority-owned Changyou expects Q4 revenue of $145M-$155M and EPS of $0.56-$0.65 vs. a consensus of $182.5M and $0.76.
- Q3 business performance: Sohu's online gaming revenue (Changyou) was down 12% Q/Q and flat Y/Y at $153M. The Sogou search platform saw revenue rise 9% Q/Q and 50% Y/Y to $148M, with both paid clicks and ad prices (cost per click) rising. Brand ad revenue was flat Q/Q and up 2% Y/Y to $152M, with Sohu Video growing 9% Y/Y to $57M. Other revenue more than doubled Y/Y to $70M. Sogou's mobile traffic exceeded PC traffic for the first time.
- Financials: Sohu's gross margin rose to 59% from 55% in Q2 and 58% in Q3 2014. Operating expenses (non-GAAP) fell 3% Y/Y to $267M. Sohu ended Q3 with $1.33B in cash, and $345M in bank loans.
- Sohu CEO Charles Zhang: "I am pleased with our quarterly results amid a sluggish economy and considerable RMB depreciation ... The soft macro economy had a major impact on traditional brand advertisers who shrank their marketing budgets. In addition, the depreciation of RMB against the U.S. dollar had an adverse effect to our reported numbers."
- Sohu: Q3 results, PR
- Changyou: Q3 results, PR
Tue, Aug. 25, 12:56 PM
- The Shanghai exchange fell another 7.6% overnight, but that has been overshadowed by a surprise rate cut (delivered after Chinese markets closed) by the PBOC and a 3.4% Nasdaq gain. The Guggenheim China Tech ETF (CQQQ +5.3%) is up 16% from its Monday morning low, and down 36% from a May peak of $45.64.
- Alibaba (BABA +6.5%) is among today's big gainers, as are e-commerce peers JD.com (JD +8.7%), Vipshop (VIPS +6.9%), LightInTheBox (LITB +13.1%), and Jumei (JMEI +12.1%). Other standouts include Weibo (WB +19.8%), 51job (JOBS +11.5%), Bitauto (BITA +10.2%), NQ Mobile (NQ +9.7%), Sohu (SOHU +6.7%), Ctrip (CTRP +8.1%), and NetEase (NTES +8.3%).
- E-House (EJ +9.8%) and subsidiary Leju (LEJU +8.6%) are up strongly after posting Q2 beats (I, II) and respectively reiterating full-year revenue guidance of $1.05B-$1.1B (+16%-22% Y/Y) and $600M-$620M (+21%-25%). Qunar (QUNR +6.2%) is doing well after posting mixed Q2 results and issuing strong Q3 sales guidance.
- ETFs: QQQC, KWEB, EMQQ
Mon, Jul. 27, 2:45 PM
- Though it beat Q2 estimates, SOHU is guiding for Q3 revenue of $470M-$500M and EPS of -$0.55 to -$0.80, below a consensus of $530.2M and -$0.39.
- Meanwhile, gaming subsidiary Changyou's (NASDAQ:CYOU) Q2 beat is accompanied by guidance for Q3 revenue of $172M-$175M and EPS of $0.64-$0.73. The latter is mostly above a $0.65 consensus, but the former is below a $204.6M consensus.
- Business performance: Sohu's Sogou search platform remained a strong point in Q2: Revenue rose 27% Q/Q and 62% Y/Y to $147M. Online game revenue (Changyou) fell 7% Q/Q and rose 12% Y/Y to $172M, and brand ad revenue rose 13% Q/Q and Y/Y to $151M, with Sohu Video ad revenue rising 17% Q/Q and 36% Y/Y to $59.
- Financials: Sohu's gross margin was 55%, up from Q1's 51% and down from Q2 2014's 58%. Operating expenses (non-GAAP) rose 8% Q/Q and fell 11% Y/Y to $237M; both the Q/Q increase and Y/Y drop were due to marketing/promotional spend changes. Sohu ended Q2 with $1.2B in cash/short-term investments, and $370M in bank loans.
- A broader selloff in Chinese stocks is likely weighing on both companies' shares.
- Sohu: Q2 results, PR
- Changyou: Q2 results, PR
Mon, Jul. 27, 9:29 AM
- After bouncing in recent weeks with the help of massive government support, Chinese markets nosedived once again overnight amid a backdrop of weak manufacturing data. Shanghai fell 8.5%, Shenzhen fell 7%, and the ChiNext Index fell 7.4%.
- Not surprisingly, many U.S.-traded Chinese tech names are off sharply in premarket trading. YY -4.2%. Qihoo (NYSE:QIHU) -5.5%. JD.com (NASDAQ:JD) -5.4%. SOHU -6%. iDreamSky (NASDAQ:DSKY) -9.6%. SouFun (NYSE:SFUN) -8%. SINA -5.5%. Weibo (NASDAQ:WB) -7.8%. Vipshop (NYSE:VIPS) -4.8%. Youku (NYSE:YOKU) -6.2%. Qunar (NASDAQ:QUNR) -6.2%. Dangdang (NYSE:DANG) -5.4%. 58.com (NYSE:WUBA) -4.7%. 500.com (NYSE:WBAI) -7.2%. Jumei (NYSE:JMEI) -5.7%. NQ Mobile (NYSE:NQ) -6%. Bitauto (NYSE:BITA) -6.3%. Autohome (NYSE:ATHM) -4.8%. Cheetah Mobile (NYSE:CMCM) -10.1%.
- Sohu and Changyou reported this morning. Baidu reports after the close.
- ETFs: CQQQ, QQQC, KWEB, EMQQ
Thu, Jul. 9, 5:40 PM
Thu, Jul. 9, 11:25 AM
- With local regulators continuing to scramble to halt plunging equity prices - among other things, investors with 5%+ stakes have been barred from selling shares for 6 months - Chinese markets reversed course last night. Shanghai rose 5.8%, Shenzhen rose 3.8%, and Hong Kong rose 4.5%. The Nasdaq is currently up 1.2%.
- Not surprisingly, U.S.-traded Chinese tech firms are flying higher. Big gainers include Sina (SINA +13.6%), Sohu (SOHU +11.1%), JD.com (JD +8.1%), Vipshop (VIPS +8.3%), Qunar (QUNR +9%), ChinaCache (CCIH +14.1%), Renren (RENN +9.5%), Wowo (WOWO +11.9%), Leju (LEJU +9.1%), China Mobile Games (CMGE +8.3%), Xunlei (XNET +9.7%), Sky-mobi (MOBI +9%), and eLong (LONG +18.1%).
- Also up strongly (previously covered): Qihoo, 21Vianet, E-House, Youku, Baozun, NQ Mobile, Weibo, Cheetah Mobile, Jumei, and Momo. In addition, YY and Dangdang are rallying after becoming the latest Chinese companies to receive going-private offers.
- The Guggenheim China Tech ETF (NYSEARCA:CQQQ) is now up 19% from a Wednesday low of $30.09; it's still down 22% from a May peak of $45.74.
- ETFs: KWEB, QQQC, EMQQ
- Two days ago: Chinese tech stocks crater; many names down over 10%
Tue, Jul. 7, 10:42 AM
- The selloff in Chinese equities refuses to let up: Shanghai fell 1.3% overnight, Shenzhen fell 5.3%, and Hong Kong fell 2.7%. The declines come amid a backdrop of frantic government efforts to halt the plunge, and requests by hundreds of Chinese companies for trading halts.
- The lion's share of U.S.-traded Chinese Web and mobile firms are down at least 5%, and many are down more than twice that. In alphabetical order by ticker, major decliners include Autohome (ATHM -10.6%), Bitauto (BITA -18.7%), Baozun (BZUN -22.7%), ChinaCache (CCIH -14.6%), Cheetah Mobile (CMCM -15.2%), China Mobile Games (CMGE -13.2%), Ctrip (CTRP -10.1%), Changyou (CYOU -12.6%), Dangdang (DANG -13.8%), iDreamSky (DSKY -15.4%), E-House (EJ -15.9%), Jumei (JMEI -20.2%), Leju (LEJU -12.1%), eLong (LONG -12.6%), Momo (MOMO -9.4%), NQ Mobile (NQ -16.7%), NetEase (NTES -12.2%), Qihoo (QIHU -10.3%), Qunar (QUNR -14.2%), Renren (RENN -17.8%), SouFun (SFUN -16.3%), Sohu (SOHU -10.9%), Taomee (TAOM -15.1%), Vipshop (VIPS -9.7%), Weibo (WB -10.9%), 500.com (WBAI -26.2%), Wowo (WOWO -26.7%), 58.com (WUBA -17.3%), Xunlei (XNET -14%), Youku (YOKU -12.2%), and YY (YY -9.4%).
- The plunge seen over the last two months (aided by panic selling and margin calls?) has led multiples for U.S.-traded Chinese tech names to compress dramatically, with forward P/E and P/S ratios often below those of U.S. peers sporting similar growth profiles. The Guggenheim China Tech ETF (CQQQ -9.3%) is down 29% from a May peak of $45.64.
- ETFs: KWEB, QQQC, EMQQ
- Yesterday: Chinese tech stocks tumble again in spite of fresh government support
- Earlier today: Chinese phone firms decline as country's markets sink
- Update: The group pared its losses a bit in afternoon trading. CQQQ closed down 5.8%.
Mon, Jul. 6, 11:01 AM
- The Shanghai exchange rose 2.4% overnight following a Greek rejection of austerity measures and the unveiling by Chinese brokerages of a government-endorsed plan to buy at least RMB120B ($19.3B) worth of shares to prop up nosediving equity prices. However, Shenzhen fell 2.7% and Hong Kong fell 3.7%, with small-cap names especially hard-hit.
- U.S.-traded Chinese Web/mobile names are seeing heavy losses (CQQQ -7.8%), with small/mid-cap firms unsurprisingly bearing the brunt of the damage. Major decliners include Sina (SINA -8.8%), Weibo (WB -11.6%), YY (YY -7.3%), Sohu (SOHU -9.1%), Changyou (CYOU -11.8%), Youku (YOKU -12.3%), Jumei (JMEI -8.2%), Xunlei (XNET -8.7%), SouFun (SFUN -9.3%), Leju (LEJU -7.6%), E-House (EJ -6.9%), Sky-mobi (MOBI -9.4%), NQ Mobile (NQ -6.3%), 500.com (WBAI -11.6%), Momo (MOMO -6%), and Dangdang (DANG -6.7%).
- The NYT observes $2.7T in value has evaporated from Chinese equities since local markets peaked on June 12. The paper also notes individual investors own over 80% of Chinese stocks, and that Chinese investors respectively own 112M and 142M accounts on the Shanghai and Shenzhen exchanges, with each exchange seeing ~20M account openings this spring.
- ETFs: KWEB, QQQC, EMQQ
Fri, Jun. 26, 11:45 AM
- As was the case a week ago, Chinese Web and mobile names are getting clocked in response to a sharp overseas selloff: Shanghai and Shenzhen respectively fell 7.4% and 7.9% overnight, putting their recent declines around the standard bear market threshold of 20%. The Nasdaq is down 0.4%.
- Explanations for China's selloff range from tighter margin requirements to cautious analyst notes to speculators simply choosing to take profits following a massive run-up. Shanghai and Shenzhen's 12-month gains now stand at 106% and 132%.
- Major U.S.-traded decliners include YY (YY -6.5%), Sohu (SOHU -5.4%), Sina (SINA -4.7%), Weibo (WB -5.2%), Xunlei (XNET -9.5%), Dangdang (DANG -8.7%), Jumei (JMEI -9.1%), Youku (YOKU -8.7%), Cheetah Mobile (CMCM -7.2%), Bitauto (BITA -6.7%), SouFun (SFUN -5.9%), ChinaCache (CCIH -5.4%), Zhaopin (ZPIN -5.6%), Wowo (WOWO -3%), and 500.com (WBAI -5.3%).
- ETFs: CQQQ, KWEB, QQQC, EMQQ
Tue, Jun. 23, 5:34 PM
Wed, Jun. 17, 10:23 AM
- Qihoo says it has received a ~$10B going-private offer from a group led by CEO Hongyi Zhou, the largest offer yet in the wave of bids received by U.S.-traded Chinese firms in recent weeks.
- Meanwhile, ahead of Qihoo's announcement, the high-flying Shanghai and Shenzhen exchanges respectively rose 1.7% and 2%. The indices are respectively up 140% and 181% over the last 12 months.
- In addition to YY and SouFun (previously covered), major Chinese tech gainers include Sina (SINA +4.8%), Weibo (WB +6.1%), Bitauto (BITA +4.9%), Youku (YOKU +6.8%), Momo (MOMO +8.3%), Xunlei (XNET +8.6%), Dangdang (DANG +5.6%), Sohu (SOHU +4.4%), Zhaopin (ZPIN +5.9%), and Jumei (JMEI +6.1%).
- ETFs: CQQQ, KWEB, QQQC
Wed, Jun. 17, 10:14 AM
- Ku6 Media (NASDAQ:KUTV) is down 1.5%, bucking China media stocks that are sharply higher this morning.
- Youku Tudou (YOKU +7.4%), Xunlei (XNET +6.3%) and Sohu.com (SOHU +5.6%) are following other Chinese stocks significantly higher, and Phoenix New Media (NYSE:FENG) is up 2.1%.
- Ku6 has lost 7.2% of its value since a Q1 report Friday where revenues slipped 32% Q/Q and expressed "substantial doubt" about its ability to continue as a going concern.
- Previously: Ku6 Media down 7.9% as Q1 revenues slide (Jun. 12 2015)
Thu, Apr. 16, 3:19 PM
- Today's notable tech gainers include Chinese online gaming/entertainment platform YY (YY +4.5%), Chinese search engine/portal owner Sohu (SOHU +5.4%), U.S. solar installer Vivint (VSLR +4.9%), U.S. solar installer Vivint (VSLR +4.9%), solar power optimizer/inverter maker SolarEdge (SEDG +5%), M2M hardware/software provider I.D. Systems (IDSY +8.9%), DSP core IP provider Ceva (CEVA +7.2%), cloud healthcare software provider Castlight (CSLT +6.1%), and NAND controller/4G transceiver vendor Silicon Motion (SIMO +4.8%). The Nasdaq is nearly flat.
- Notable decliners include local services marketplace Angie's List (ANGI -6.6%), IP licensing firm Acacia (ACTG -4.4%), and gaming system maker IGT (IGT -5.1%).
- Dougherty has launched coverage on I.D. Systems at Buy, and Canaccord has done the same for Ceva. Vivint is one of several solar firms to get an Outperform rating from Avondale Partners. Silicon Motion has surged to fresh 52-week highs, and is up 22% since last week's Q1 pre-announcement.
- Angie's List is giving back some of the big gains seen yesterday after announcing long-time CEO Bill Oesterle plans to retire, and slightly hiking its 2015 adjusted EBITDA guidance. IGT is returning a chunk of the gains seen last week following the closing of the Gtech merger.
- Previously covered: Etsy, AMD, Fairchild, SanDisk, 58.com, Audience, Travelzoo, Sequans, Carbonite, Identiv
Wed, Apr. 8, 10:58 AM
- Following a big overnight rally in Hong Kong (followed a 3-day holiday during which Shanghai rallied), beaten-down Chinese Internet and mobile stocks have soared in U.S. trading.
- The biggest gainers include many names that are far below their 2014 highs: The group includes Qihoo (QIHU +10.5%), YY (YY +14.9%), Taomee (TAOM +14.3%), Sina (SINA +8.7%), and Weibo (WB +12.1%). Mobile game publishers Sky-mobi (MOBI +12.6%), China Mobile Games (CMGE +8%), and iDreamSky (DSKY +13.4%) are also sharply higher, as are online real estate plays SouFun (SFUN +13.1%), E-House (EJ +6.1%), and Leju (LEJU +9.8%).
- Giants Alibaba (BABA +3.4%) and Baidu (BIDU +4.1%) aren't being left out. Neither are Youku (YOKU +7.5%), 21Vianet (VNET +7.4%), Momo (MOMO +6.8%), Sohu (SOHU +7.7%), Changyou (CYOU +4.5%), Dangdang (DANG +7.3%), Vipshop (VIPS +4.8%), JD.com (JD +3.9%), Jumei (JMEI +6.6%), Sungy Mobile (GOMO +5.8%), China Techfaith (CNTF +7.1%), and KongZhong (KZ +5.5%).
- Alibaba has proposed an asset injection into its money-losing Alibaba Pictures (+36% in Hong Kong) film arm. Sky-mobi has seen Rosenblatt (Buy) hike its target to $11, while noting many Chinese mobile game developers have been bought out; it thinks Sky-mobi's investments in developers could be worth $140M. NetEase has been upgraded by CICC Research.
- Over in Hong Kong, software/cloud services provider Kingsoft (OTCPK:KSFTF) rose 24.2% to HKD$29.50. Messaging/gaming giant Tencent (OTCPK:TCEHY) rose 3.3% to HKD$154.80.
- ETFs: KWEB, CQQQ, QQQC
Fri, Mar. 20, 12:20 PM
- #3 Chinese search engine Sogou is planning an IPO that will feature a $3B+ valuation, Bloomberg reports. Sources add Sogou, which is controlled by Sohu (SOHU +3.7%), could see an offering in 2H15.
- Sogou has been easily outgrowing Sohu's portal and gaming ops: Its revenue rose 70% Y/Y in Q4 to $119M. It had an estimated 6.9% Q4 Chinese search share, trailing Baidu's (NASDAQ:BIDU) 74.4% and Qihoo's (NYSE:QIHU) 17.3%.
- Tencent (OTCPK:TCEHY) bought a 40.9% stake in Sogou in 2013 for $516M, and has integrated Sogou's services with its wildly popular WeChat mobile messaging platform (recently hit 500M MAUs). Aside from search, Sogou's services include a Web directory, games, and popular Chinese-language typing software (Sogou Pinyin).
Thu, Mar. 12, 3:13 PM
- Major tech gainers are about even with major decliners on a day the Nasdaq is up 0.8% (thanks to a broader market rally) in spite of Intel's Q1 warning.
- Notable gainers include 3D printer maker Voxeljet (VJET +5.9%), cloud ERP/HR software provider NetSuite (N +3.7%), flash sales site Zulily (ZU +7.5%), stock photo marketplace Shutterstock (SSTK +6.5%), cloud telecom expense software vendor Tangoe (TNGO +5.6%), It services provider Virtusa (VRTU +4.7%), online video ad platform TubeMogul (TUBE +4%), and online ad campaign software provider Marin (MRIN +4.2%).
- Notable decliners include several Chinese firms. Specifically, search/portal/game provider Sohu (SOHU -5.3%), entertainment/IM/gaming platform YY (YY -4.2%), mobile game publisher Sky-mobi (MOBI -5.8%), and sports lottery site 500.com (WBAI -5.6%).
- Other big decliners include printer maker Lexmark (LXK -2.6%), chip packaging/testing provider ChipMOS (IMOS -4.7%), and smart grid/wind turbine component maker AMSC (AMSC -6.3%).
- Zulily is just a day removed from making fresh lows the wake of last month's Q4 miss and soft guidance. BMO provided an upbeat note on TubeMogul yesterday.
- YY has now more than given back the gains it saw last week following its Q4 beat. ChipMOS posts Q4 results after the close, and is two days removed from reporting its February sales rose 10.5% Y/Y, a slower pace than in recent months (thanks in part to the timing of the Chinese New Year). 500.com recently crashed due to license suspensions, but had bounced from its lows. Lexmark drop comes shortly after HP refreshed its printer lineup.
- Previously covered: Box, Rosetta Stone, CyberArk, Integrated Silicon, Universal Display, Spherix, Synchronoss, Ingram Micro
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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