After showing early signs of a pickup last fall, online real estate services firm Soufun (NYSE: SFUN) is sending even stronger signals that springtime may indeed be coming for companies that make their money from buying and selling activity in the property market. Here it’s important to point out that this coming spring for market leaders Soufun and E-House doesn’t mean that China’s real estate prices are going to start rising sharply again anytime soon. Instead, what it means is that real estate buyers and sellers are starting to feel confident that the market has stabilized after more than a year of uncertainty due to government cooling policies.
Tag Archives: e-house
News Digest: December 11 报摘： 2012年12月11日
The following press releases and media reports about Chinese companies were carried on December 11. To view a full article or story, click on the link next to the headline.
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- Xinhua Opens Twitter Account, Already Has 5,000 Followers (Chinese article)
- China Mobile (HKEx: 941) to Dive into E-Commerce – Source (English article)
- Zhejiang Geely, Volvo in 3 Technological Cooperation Agreements (HKEx announcements)
- Suntech (NYSE: STP), Siemens Team on 100MW of Solar Projects in South Africa (PRNewswire)
- E-House (NYSE: EJ) to Issue New Shares to Management, Repurchase Shares (PRNewswire)
SouFun Results: Real Estate Pick-Up 搜房业绩：房屋交易回暖
The latest quarterly results from online real estate services firm SouFun (NYSE: SFUN) point to a pick-up in real estate buying and selling, which should benefit names like SouFun and rival E-House (NYSE: EJ) that benefit from sales activity and are less concerned with pricing trends. SouFun has given us a wide range of numbers in its latest quarterly report, but the one that caught my attention was the company’s decision to raise its 2012 revenue outlook to $400-$420 million, from a previous outlook of $390-$410 million.
Jingdong Mall Tries Gaming 京东商城有意进军网游业
When future historians look at the early days of the China Internet, Jingdong Mall will probably be remembered as a sort of hyperactive organism that had too much money and tried to do too many things, wreaking havoc on the entire web community in the process. That’s my latest assessment of this hyperactive e-commerce giant, which also calls itself 360Buy, following the latest reports that Jingdong now plans to get into the online games business. (English article; Chinese article)
News Digest: May 25, 2012 报摘： 2012年5月25日
The following press releases and media reports about Chinese companies were carried on May 25. To view a full article or story, click on the link next to the headline.
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◙ China Banks May Miss Loan Target for 2012, Officials Say (English article)
◙ China’s CIC eyes Up to $2 Billion Stake in Alibaba Group: Sources (English article)
◙ E-House (NYSE: EJ) Reports Q1 Results (PRNewswire)
◙ Tencent (HKEx: 700) to Invest $1 Bln in E-Commerce Subsidiary (English article)
◙ China Auto Withdraws Nasdaq Listing Application (Chinese article)
China Tech Stocks: Dividend Plays? 中国科技股：发放股利
Since everyone else is focusing on the rapidly slowing growth in the latest quarterly results from leading Internet company Tencent (HKEx: 700), I thought I’d take a look at a less explored part of the company’s newly issued report, namely a dividend that it quietly boosted 36 percent. The sharp increase, at least on a percentage basis, reflects a broader effort among overseas-listed China tech and Internet firms to try to rekindle investor interest in their shares, as many start to see a rapid slowdown in growth with the maturation of their markets. Let’s look at Tencent first, which saw its fourth-quarter profit rise a modest 15 percent, not exactly impressive for a company whose annual profit rose 56 percent in 2010 and which saw triple-digit gains in many previous years. (results announcement; English article) Meantime, the company announced it was raising its annual dividend to HK$0.75 per share from HK$0.55 the previous year, a 36 percent increase. In terms of actual yield, investors will still get a modest 0.4 percent return from the dividend based on Tencent’s latest closing price. But still, any return at all would be a plus for holders of Tencent shares last year, which fell 10 percent amid a broader cooling in sentiment towards overseas-listed China tech stocks after a meteoric rise in previous years. Tencent’s boosting of its dividend comes as a growing number of US-listed Chinese tech and Internet firms have rolled out first-ever dividends, with a diverse range of names including chip designer Spreadtrum (NYSE: SPRD), online game operator Giant Interactive (NYSE: GA) and real estate service specialists Soufun (NYSE: SFUN) and E-House (NYSE: EJ) all announcing dividends starting last year in a bid to support their sagging share prices. Most of these companies are relatively cash-rich and the awarding of dividends is partly acknowledgement that they don’t need the money for operations, since most are already profitable, and most don’t plan to make any major acquisitions in the near future. Furthermore, none have indicated whether these dividends will become a regular occurrence, and I suspect many will quietly retire the policy if and when their share prices start to rebound. Still, Tencent’s latest moves do reflect a new reality setting in for an increasing number of tech firms, namely that growth could slow significantly in the next few years, causing investors to look elsewhere for excitement in a market full of other high-growth stories. As that happens, look for some of the biggest names, especially cash-rich ones like Tencent, to quietly boost their dividends, providing a stable if not very exciting source of returns for investors who don’t mind the slower growth.
Bottom line: A growing number of overseas-listed Chinese tech and Internet firms will offer dividends to attract investors as their profit growth slows.
Related postings 相关文章:
◙ Real Estate Down, But E-House Jumps 房地产股票下跌，但易居上涨
◙ Soufun Looks For More Support With New Dividend 搜房网借新派息计划寻求支撑股价
Real Estate Down, But E-House Jumps 房地产股票下跌，但易居上涨
China’s volatile real estate market is a never-ending source of news these days, with rumors cropping up just about every week about changes of heart in the government’s steadfast determination to cool the overheated market, even though Beijing consistently denies the rumors. The latest news seems to finally acknowledge the market may be bracing for a long winter, with S&P saying Chinese developers are facing very serious risk of downgrade to their debt. But in a curious twist, E-House (NYSE: EJ), one of the nation’s top real estate services firms, seems to have excited investors with an earnings report that looks very mixed to me, including a massive loss, although the company made a relatively strong forecast for 2012 and also offered a first-ever dividend. Let’s look at the macro news first, which has S&P sounding a very bearish note on China’s real estate sector, saying many developers will be forced to refinance their debt, most likely at higher interest rates, as they are forced to slash prices to boost sluggish sales. (English article) S&P said home prices, which have been falling by low single-digit percentages since the second half of last year, could be down 10 percent year-on-year by June as developers who have been trying to keep prices steady finally give up and cut them to move inventory. The 10 percent figure looks like a good estimate considering current market trends, and I would fully expect to see it accelerate even more in the second half of the year, with year-on-year declines of 20-25 percent likely by year end, dealing a blow to the nation’s many real estate developers. Perhaps investors are expecting a boom in transaction volumes as developers are forced to lower prices, which would play to the advantage of real estate service companies like E-House that depend on transactions rather than home prices for their income. That’s one of the few reasons I can think of for the 10 percent jump in E-House shares after the company reported it swung to a $32 million net loss in the fourth quarter, as revenue slipped 6 percent. (company announcement) Investors may have been encouraged by the E-House’s announcement of a new dividend, following rival Soufun (NYSE: SFUN), which also announced a dividend last year. But at 15 cents per ADS, the payout isn’t very big, equal to about 2 percent of its last closing price. Instead, I suspect investors are excited about E-House’s forecast that 2012 revenue will rise about 25 percent this year despite the weak market, indicating that it indeed does see sales volumes picking up sharply as debt-heavy developers and home owners start selling their homes when they realize the market won’t improve anytime soon.
Bottom line: Real estate developers will come under growing pressure this year as they refinance debt at higher interest rates, while services firms will benefit from rising transaction volumes.
Related postings 相关文章:
◙ Soufun Looks For More Support With New Dividend 搜房网借新派息计划寻求支撑股价
◙ SouFun, NetEase: Slowing Growth Stories 搜房网、网易：增长放缓
◙ E-House, Blackstone Moves Auger Real Estate Rebound 中国房地产市场可能接近底部
net cash $392 million
News Digest: March 9, 2012 报摘： 2012年3月9日
The following press releases and media reports about Chinese companies were carried on March 9. To view a full article or story, click on the link next to the headline.
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◙ China Telecom (HKEx: 728) Gets More Than 200,000 Advance Orders for iPhones (Chinese article)
◙ Suntech (NYSE: STP) Reports Q4 and Full Year 2011 Results (PRNewswire)
◙ China’s Developers to Face More Downgrades on Refinancing Risks, S&P Says (English article)
◙ E-House (NYSE: EJ) Reports Q4 and Full Year 2011 Results and Declares Cash Dividend (PRNewswire)
◙ Yaodian100 Bankrupt, Seeks Acquirer – Source (English article)
◙ Latest calendar for Q4 earnings reports (Earnings calendar)
SouFun, NetEase: Slowing Growth Stories 搜房网、网易：增长放缓
The latest earnings results from real estate and online game bellwethers SouFun (NYSE: SFUN) and NetEase (Nasdaq: NTES) are showing a broader story of slowing growth, with the former in danger of slipping into the red while the latter needs to rein in its rapidly rising costs. Let’s look at SouFun first, which is taking a hit from China’s stagnating real estate market. Despite rapidly falling prices and anemic transaction volumes, SouFun managed to post 18 percent revenue growth for the quarter, which was sharply lower than its 53 percent growth for the year. (results announcement) In a cautiously positive sign, the company said revenue would grow 10-15 percent this year, meaning growth will slow but should still remain positive. One bright spot for SouFun was its listing services revenue, which makes up about 20 percent of its total and was up 38 percent in the fourth quarter. I suspect this figure will continue to be strong and perhaps even accelerate this year, as transaction volumes finally start to grow when people start to sell their homes after realizing Beijing has no plans to relax its strict restrictions on the market anytime soon. That said, the company still faces the very real prospect of joining rival E-House (NYSE: EJ) in the net loss column, which investors seem to realize, bidding SouFun stock down 9 percent after the results came out. Turning to NetEase, the company’s results look a bit stronger, with revenues up 32 percent, led by strong growth for its core online games business. (results announcement) I like the fact that the company is returning to its strength as a developer of its own games, which are more profitable than licensing titles from third-party developers, which is what most of NetEase’s rivals do. The company’s profits also posted a relatively strong 26 percent gain, though they were up just 8 percent quarter on quarter. The most worrisome sign is the company’s operating expenses, which jumped 65 percent year-on-year. It blamed that jump on marketing for new self-developed games, which is a fair enough explanation. But that kind of rapid acceleration of expenses is clearly unsustainable over the long term, and could easily kill the company’s profit growth if NetEase isn’t careful.
Bottom line: SouFun is in danger of slipping into the red as China’s real estate market stagnates, while NetEase could see profit growth stall unless it gets its expenses under control.
Related postings 相关文章:
◙ Soufun Looks For More Support With New Dividend 搜房网借新派息计划寻求支撑股价
◙ E-House Foundations Looking Outright Shaky 易居中国根基明显摇晃
◙ NetEase Makes Buzz With Buyback, Pigs 网易回购股票和养猪重大决策或在即
Soufun Looks For More Support With New Dividend 搜房网借新派息计划寻求支撑股价
When does a 31 percent dip in your share price look good? When your rivals’ share prices have fallen by even more, or at least that seems to be the thinking at real estate services firm Soufun (NYSE: SFUN), which has just announced its second dividend in the last 4 months amid a broader sell-off that has seen many US-listed China stocks tumble by even more in the last few months. Soufun’s latest plan looks even more attractive now than the first plan announced in August (previous post), as the payout amount will remain at $1 per American Depositary Share, translating to a return of about 7.5 percent based on the company’s latest share price. (company announcement) That’s up from a payout ratio of about 5 percent for the August dividend, when the company’s shares were quite a bit higher. A growing number of US-listed companies have tried the dividend approach, including chipmaker Spreadtrum (Nasdaq: SPRD) and online game specialists Giant Interactive (NYSE: GA) and most recentlly Shanda Games (Nasdaq: GAME), betting that cash payouts will appeal more to investors than traditional share buybacks. So how effective is the dividend strategy? A quick comparison shows that while Soufun’s shares are down 31 percent since it announced its first dividend, its closest rival, E-House (NYSE: EJ) is down by an even bigger 42 percent over the same period, showing the strategy may have some effect. Of course, Soufun’s recent posting of solid third-quarter results, even in the face of China’s rapid real estate slowdown, may also be helping its stock. (previous post) For all of those reasons, Soufun may indeed look like a nice play going forward. Dividends may be good for short-term investors, helping to support stock prices and provide some definite returns in uncertain markets. But for longer term investors, there’s still no replacement for solid company fundamentals and growth prospects, meaning it still pays to check a company’s bottom line no matter how nice the dividend.
Bottom line: The dividend approach being tried by many US-listed China firms is providing some short-term support for share prices and quick returns for investors.
Related postings 相关文章:
◙ Shanda Plays Games With Big Dividend 盛大游戏寄望高额分红计划提振股价
◙ Investors Pocket Spreadtrum, Giant Dividends and Run
◙ Sofun’s New Strategy: Dividend Wave Ahead? 搜房网新策略：中国概念股派息潮即将来临？
E-House, Blackstone Moves Auger Real Estate Rebound 中国房地产市场可能接近底部
There’s a couple of interesting news bits coming from the struggling real estate sector, which indicate its current downturn could be nearing a bottom and that better days may be on the horizon in the next year or two. One of those bits is seeing E-House (NYSE: EJ), one of China’s top real estate services providers, taking control of the China franchise of major US home seller Century 21 (NYSE: CTC); while the other is seeing several major players, including Blackstone (NYSE: BX) and China’s sovereign wealth fund, setting up a real estate financing joint venture. Let’s start with the E-House deal, which is seeing the Chinese firm take a 58 percent stake in Century 21 China for a relatively modest $25 million. This deal is clearly being driven by a weak real estate market that has seen transaction volumes plummet as China takes steps to cool the market, driving E-House into the red in its latest quarter (company announcement) and leaving transaction-driven brokerages like Century 21 also struggling. This deal comes as E-House attempts to buy out China Real Estate Investment Corp (Nasdaq: CRIC), its joint venture with Sina (Nasdaq: SINA) (company announcement), and is the latest sign of consolidation as the real estate services industry struggles for survival. The moves look like good ones for E-House, and should leave it well positioned to be a true industry leader when the current downturn ends. The second news bit is seeing Blackstone, China Investment Corp (CIC) and domestic real estate developer Greentown (HKEx: 3900) in talks to set up a real estate finance joint venture with 2 billion yuan, or about $300 million, in registered capital, with CIC holding 60 percent. (English article) Establishment of this venture is yet another sign that the big players like CIC and Blackstone see the current downturn ending in the next 1-2 years, as that’s the earliest we might see any of their new projects come to market. With many of the country’s real estate developers now facing a cash crunch in the current downturn, demand should be strong for this kind of financing in the next 1-2 years, boding well for the venture.
Bottom line: A big acquisition by E-House and a major new real estate financing joint venture are signs that China’s real estate downturn is near bottom.
Related postings 相关文章:
◙ Soufun Shores Up Foundation With Strong Results, Outlook 搜房网靓丽财报和前景或预示房产业向好
◙ Real Estate Relief Coming With Foshan Reversal 佛山放宽限购政策的启示
