E-House (China) Shares Gain on Solid Q3 Earnings - Analyst Blog

By Zacks Equity Research,

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Shares of E-House (China) Holdings Limited ( EJ ) jumped 11.38% and closed at $11.16 in yesterday's regular trading session on the NYSE following the disclosure of its robust third-quarter 2013 results.

This Chinese real estate company - E-House - reported net income attributable to its shareholders of 14 cents per ADS, well ahead of the Zacks Consensus Estimate of 8 cents. The company had experienced a net loss attributable to its shareholders of 18 cents per ADS in the comparable prior-year period.

E-House's solid performance is backed by substantial revenue growth that climbed 43% year over year to $195.7 million in the quarter under review and surpassed the Zacks Consensus Estimate of $173 million.

An 85% year-over-year surge in revenues in its real estate online services, chiefly driven by growth in e-commerce revenues, contributed to this upside. Also, revenues from real estate information and consulting services escalated 47% year over year. These factors collectively helped compensate for slower growth in revenues from primary real estate agency services (it moved up 10% year-over-year). The company exited the quarter with cash and cash equivalents of $216 million.

Further, E-House has raised its already hiked fiscal 2013 total revenue guidance. It now guides revenue of approximately $700, up from $630 million expected earlier. This also reflects a 51% elevation from $462.4 million in 2012.

Notably, E-House has been making concerted efforts for some time to develop its real estate e-commerce business and is now enjoying the benefits. The company, which had initiated the concept of real estate e-commerce in 2011, launched its e-commerce 3.0 open transaction platform in June this year.

E-House has now opted for strategic cooperation with CITIC Bank Corporation Limited for the e-commerce 4.0 platform, for combining the real estate e-commerce with financial services featuring the "Leju Loan" through CITIC Bank. This move is aimed at enhancing the purchasing power of homebuyers and drive sales conversion rates.

E-House currently carries a Zacks Rank #1(Strong Buy). One can also look at other stocks in the same industry like FirstService Corporation ( FSRV ), Kennedy-Wilson Holdings, Inc. ( KW ) and HFF, Inc. ( HF ). While FirstService and Kennedy-Wilson carry a Zacks Rank #1, HFF has a Zacks Rank #2(Buy).

E-HOUSE CHINA (EJ): Free Stock Analysis Report

FIRSTSERVICE CP (FSRV): Free Stock Analysis Report

HFF INC-A (HF): Free Stock Analysis Report

KENNEDY-WILSON (KW): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Earnings , Stocks
Referenced Stocks: EJ , FSRV , HF , KW

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