China Finance Online - Still Cheap And Likely To Pre-Announce A Record Q2 In The Coming Days

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Summary

  • Net revenues for Q1 increased by 321 percent year-over-year.
  • JRJC is likely at any time to pre-announce a record Q2.
  • A peer-group comparison shows JRJC is still significantly undervalued and worth about $20 per share.

Introduction

China Finance Online Co. Ltd (NASDAQ:JRJC) is cheap and rapidly growing; creating monster potential for investors. The latest reported quarterly revenues rose 321 percent compared to the same period the previous year, and we believe Q2 will be another record quarter likely to be pre-announced any day. We have completed a thorough review of JRJC and determined the stock is grossly undervalued. Therefore, we assign a buy rating with a $20 price target.

Background

JRJC is the only Chinese web-based financial information/service company listed on a major U.S. exchange. Both its portal sites, jrj.com and stockstar.com, are highly ranked on alexa.com, making us confident JRJC will sustain and grow revenues.

JRJC has four divisions:

  1. jrj.com - The leading provider of financial data and information in China and one of the world's leading Chinese finance portals.
  2. stockstar.com - China's first stock-market focused website, it also is one of the largest mobile financial information/service providers in China.
  3. Shenzhen Genius - Uses cutting-edge design concepts to develop financial-database and data-terminal products for financial institutions. It is supported by strategic partnerships with well-known universities, government agencies, stock exchanges, financial institutions and other third-party vendors.
  4. iSTAR Finance - Obtained Hong Kong SFC (Securities and Futures Commission) licenses to engage in securities trading, futures trading and securities-advising services. In addition to the Hong Kong market, in order to provide global trading and investment solutions to its clients, iSTAR Finance also will focus on securities and futures contract trading on overseas securities and futures exchanges.

China Finance Online launches China's first integrated web-based securities trading platform

On Aug. 18, 2014, JRJC entered into a strategic partnership with CITIC Securities (OTCPK:CIIHF) to integrate jrj.com and stockstar.com with a trading and settlement system. JRJC calls this trading platform Zhengquantong, which translates to Securities Master. Zhengquantong is the first

This article was written by

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We are a research group that consults hedge fund and high-net worth clients. We specialized in identifying special opportunities from both the long and short side. The writer for 3D Analytics has professional traded for hedge funds for 10+ years and specializes in 1) finding hidden, unrecognized value, 2) shorting overvalued stocks, and 3) arbitrage situations. The articles are written solely by him, but has a group that assist him in finding opportunities, basic research, and editing.

Disclosure: The author is long JRJC. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it. The author has no business relationship with any company whose stock is mentioned in this article.

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