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China Stock Roundup: Ctrip Impresses, JA Solar Misses on Earnings, Qunar Posts Wider Loss


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Markets enjoyed a week of strong gains following encouraging comments from Premier Li Keqiang and state backed funds propping up stocks during most trading sessions. The benchmark index gained on Monday after the chairman of the country's securities regulator indicated he would continue to take steps to boost markets. The Shanghai Composite increased on Tuesday as speculation grew that funds with state linkages had propped up markets.

The benchmark index advanced on Wednesday following encouraging comments from Premier Li about stimulus measures. The Shanghai Composite advanced again on Thursday as tech stocks led gains. The benchmark index advanced again on Friday as the speed of the real estate recovery increased and the yuan gained.

JA Solar Holdings Co. Ltd. JASO posted fourth-quarter 2015 adjusted earnings of 49 cents per diluted ADS, missing the Zacks Consensus Estimate of 53 cents by 7.5%. Ctrip.com International, Ltd. CTRP reported adjusted fourth-quarter 2015 earnings of 3 cents per share, compared to the Zacks Consensus Estimate of break even. Qunar Cayman Islands Limited QUNR reported adjusted fourth-quarter 2015 loss of $5.66 per share, wider than the Zacks Consensus Estimate of loss of 83 cents.

Last Week's Developments

Last Friday, the Shanghai Composite Index gained 0.2%, reducing weekly losses to 2.2%. The benchmark index gained after two days of losses as materials stocks advanced. However, trading volumes remained low, with the turnover falling 36% below average levels. Weekly losses were a result of the failure of the government's efforts to boost investor sentiment. Meanwhile, they waited for data on industrial production and fixed asset investment to be released over the weekend.

The Hang Seng China Enterprises Index closed in the green, breaking four day chain of losses. The Hang Seng increased 1.7%, boosted by railway stocks. Additionally, this index also gained after four days of losses, advancing 1.1%. The CSI 300 moved up 0.2%, as gains made by stocks of metal producers outweighed losses incurred by industrials.

Markets and the Economy This Week

The benchmark index gained the most in a week on Monday, increasing 1.8% after the chairman of the China Securities Regulatory Commission indicated he would continue to take steps to boost the markets. Developers revealed that they had made acquisitions, adding to the day's gains. The securities regulator chief said that the government's rescue fund would continue to intervene in the markets while a new system for IPOs would come into place only later. 

These announcements came on the back of poorer than expected economic data released over the weekend. Industrial output increased 5.4% while retail sales increased 10.2% year-over-year. Aggregate financing and new yuan loans also came in below most estimates.

The CSI 300 added 1.6% with a sub-index of tech companies gained 3.8%. The Hang Seng moved up 1.2% while the Hang Seng China Enterprises index advanced 1.5%. The ChiNext index posted its highest increase in six weeks, jumping 4.6%.

The Shanghai Composite Index increased 0.2% on Tuesday after losing nearly 1.4% at one point. Gains came late in the session even as speculation grew that funds with state linkages had propped up markets during ongoing policy discussions. PetroChina Co. PTR , considered to a favorite of state buying activities moved upward for the second consecutive day.

Meanwhile, the People's Bank of China reportedly outlined a series of rules related to a tax on forex trading. This levy intends to reduce currency speculation. The CSI 300 gained 0.3%, with sub-indexes of utility and consumer staples stocks adding a minimum of 1.4%. The Hang Seng declined 0.7% while the Hang Seng China Enterprises Index moved 0.9% lower.  

The benchmark index advanced 0.2% on Wednesday with energy and financial stocks leading gains. The day's gains were attributable to Premier Li Keqiang's assurances that "innovative measures" would be utilized to boost economic growth. Li added that since the global economy was weakening, the country would need to discover new growth drivers in case growth slips from the targeted rate.

Other announcements made by him also provided markets with necessary impetus. Meanwhile, crude prices rose following a decline in the pace of U.S. crude stockpile buildup. PetroChina gained for a third successive day, advancing 1.3%. However, a gauge of consumer staples stocks dropped 1%. The Shenzhen Composite moved 1% lower. The Hang Seng dipped, losing 0.2% while the Hang Seng China Enterprises Index declined 0.4%.

The Shanghai Composite Index added 1.2% on Thursday with tech stocks leading gains. Gains came on the back of news that the Federal Reserve has reduced its forecast for the number of rate hikes this year. Additionally, speculation rose that certain banks would resume margin lending activities. The small cap heavy ChiNext index gained 5.6%, its highest increase over two months.

The Shenzhen Composite advanced to touch its highest level in three weeks, gaining 3.6%. Even though 1,000 stocks moved higher, several targets of government fund buying, including PetroChina declined. Consumer discretionary and tech stocks led gains for the CSI 300. The Hang Seng advanced 1.2% while the Hang Seng China Enterprises Index gained 2.4%.

The benchmark index advanced 1.7% on Friday as the speed of the real estate recovery increased and the yuan gained. Additionally, the small rally continued as fears of an oversupply of stocks receded. Meanwhile, the Shanghai Composite registered its highest weekly increase in nearly five months, gaining 5.2%.

The real estate recovery was hastened after new home prices increased in 47 cities in February compared with 38 in the preceding month. The small cap heavy ChiNext index moved up 4.3% on Friday to post a record weekly increase of 13%. The Shenzhen Composite experienced its highest weekly increase since June. The CSI 300 advanced 1.5% with tech shares posting the highest gains.

Stocks in the News

Ctrip.com International, Ltd. reported adjusted fourth-quarter 2015 earnings of 3 cents per share, compared to the Zacks Consensus Estimate of break even. This was also a significant improvement over loss of 13 cents reported in the same period last year. However, the figure was substantially lower than adjusted earnings of $1.05 per share reported in the third quarter of 2015.

Ctrip.com reported revenues of $444 million, higher than the Zacks Consensus Estimate of $434 million.  This was also 44.2% higher than the figure posted in the year-ago quarter. However, it was substantially lower than the third quarter figure of $501 million. For fiscal year 2015, Ctrip.com reported earnings of $1.10 per share. Revenues increased by 48% to $1.7 billion.

JA Solar Holdings Co. Ltd. posted fourth-quarter 2015 adjusted earnings of 49 cents per diluted American Depositary Share (ADS), missing the Zacks Consensus Estimate of 53 cents by 7.5%. Earnings, however, surged from the year-ago figure of 30 cents by 63.3%. Full-year earnings came in at $1.53, up 82.1% year over year.

JA Solar's revenues in the reported quarter were $709.3 million, beating both the Zacks Consensus Estimate of $676 million by 4.9% and the year-ago figure by 28.5%. Full-year revenues of $2,088 million soared 19.7% year over year. Total shipments in the fourth quarter 2015 were 1,366.2 megawatts ("MW"), up 43.4% year over year.

JA Solar expects to ship 1.0-1.1 gigawatts ("GW") of cells and modules in the first quarter of 2016. For 2016, the company projects to ship 5.2-5.5 GW of cells and modules.

Qunar Cayman Islands Limited reported adjusted fourth-quarter 2015 loss of $5.66 per share, wider than the Zacks Consensus Estimate of loss of 83 cents. This was also significantly higher than the loss of 87 cents per share posted in the previous quarter and the year ago loss of 48 cents.  

However, Qunar reported revenues of 200 million, a year-over-year jump of 138.1%, which beat the Zacks Consensus Estimate of $181 million. Mobile revenues accounted for 75.3% of Qunar's total fourth-quarter revenue as against 49.5% in the year-ago quarter.

For fiscal year 2015, Qunar reported loss of $8.85 per share. Revenues jumped 137.4% year-over-year to $ $643.9 million. Mobile revenues surged 316.1% on a yearly basis and now makes up 70.7% of total revenues, substantially higher than the year ago contribution of 40.3%.

Noah Holdings Limited NOAH reported adjusted fourth-quarter 2015 earnings of 23 cents per share, lower than the previous quarter's figure of 41 cents. However, this was an improvement over the year ago figure of 26 cents. For fiscal year 2015, Noah Holdings reported earnings of $1.59 per share.

Noah Holdings reported revenues of $89 million, 7.2% higher than the figure posted in the third quarter of 2015. Additionally, revenues registered a 41.3% year-over-year increase. For fiscal year 2015, revenues increased by 38.7% to $327.3 million. This was primarily attributable to a rise in recurring services fees, one-time commission revenues and performance based income.

Homeinns Hotel Group HMIN reported adjusted fourth-quarter 2015 loss of 4 cents per share, lower than previous quarter's earnings of 48 cents. This was also lower than year ago earnings of 30 cents per share. For fiscal year 2015, Noah Holdings reported earnings of 54 cents per share.

Homeinns reported revenues of $244 million, 11.3% lower than the figure posted in the third quarter of 2015. Additionally, revenues declined marginally than the year-ago figure of $247 million. For fiscal year 2015, revenues declined 0.2% to $1,029.8 million.

eLong, Inc. LONG reported adjusted fourth-quarter 2015 loss of $1.36 per share, wider than previous quarter's loss of 66 cents. This was also a more grievous loss than year ago loss of 75 cents per share. For fiscal year 2015, Noah Holdings reported loss of $4.32 per share.

eLong reported revenues of $45million, 11.8% lower than the figure posted in the third quarter of 2015. However, revenues increased 4.7% from the year-ago figure of $43 million. For fiscal year 2015, revenues declined 5% to $159.3 million.

Performance of Most Actively Traded US-listed Chinese Stocks

The table given below shows the price movements of 10 Chinese companies with the highest three-month average trading volume on U.S. exchanges. Price movements over the last five days and during the last six months have been included.

Ticker

Last 5 Day's Performance

6-Month Performance

BABA

+3%

+19.3%

BIDU

+2.5%

+33.4%

BITA

+8.2%

+1.6%

CMCM

+14%

-8.2%

CTRP

+4.8%

+28.6%

EDU

+9%

+88.9%

JD

-2.6%

+4.2%

JMEI

-2.5%

-36.9%

KANG

+2.6%

+43.6%

LFC

+4.6%

-31.3%

Next Week's Outlook:

The benchmark index has registered strong weekly gains this week mostly due to assurances on the market and economy from the government and regulators. Additionally, state backed funds have stepped in to prop up markets during policy discussions, adding to the week's gains. A rise in crude prices and a softer outlook on rate hikes from the U.S. Federal Reserve have also provided stocks with the necessary impetus.

Improvements have been witnessed across several areas, especially the real estate sector which has benefited from targeted government measures. However, economic data continues to be discouraging with retail sales and industrial production data coming in below expectations. Economic releases will take a hiatus till the end of the month. In their absence, comments from the government and sector specific steps are likely to determine market direction.

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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

CTRIP.COM INTL (CTRP): Free Stock Analysis Report

ELONG INC-ADR (LONG): Free Stock Analysis Report

PETROCHINA ADR (PTR): Free Stock Analysis Report

JA SOLAR HOLDGS (JASO): Free Stock Analysis Report

QUNAR CAYMN LTD (QUNR): 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: Business , Investing , Earnings , Stocks
Referenced Symbols: CTRP , NOAH , PTR


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