| SINA - Lower Growth and Uncertainty - SELL |
3/9/2010 |
The Chinese government restricts indecent messages on internet and mobile, so that there are fewer small portal ads on sina.com.
We adjust our estimate of the rate of decline in ad revenues in 1Q10 – from 11% QOQ to 15% QOQ.
It may bring some uncertainty that Sina neither consolidated the real estate ad revenues nor added CRIC profits after operating profits.
P/E Band concludes a down side of 27% and a target price of USD30. Downgrade to SELL. |
| VISN - China Ad Co - Strong Growth - 80% Upside |
3/9/2010 |
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During 2009 VISN’s display based market share rose to 77% in the mobile TV industry, compared to 42% in 2008.
Powered by private equity funding, the competitor Towana has not given up; therefore, we believe the ongoing price war will negatively impact 1Q10, the media industry’s weak season.
We believe our estimate of a flat EPS for 2010 is conservative, as Towana cannot bear the price war for a long period of time given its minor market share.
P/E band suggests an upside of 78% and a target price of USD9. BUY
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| SHANDA - 30% DECLINE YTD - CLOSE TO OUR PRICE TARGET - UPGRADE FROM SELL TO HOLD |
3/3/2010 |
SNDA’s 30% share price decline year-to-date has brought the shares close to our target price – we are upgrading the shares from SELL (which we recommended in December) to HOLD. We believe the Company is now fairly valued.
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| BAIDU (BIDU) - GOOGLE EVENT IS A POSITIVE SIGNAL - UPGRADE TO BUY |
2/23/2010 |
Google (Nasdaq: GOOG), Baidu’s only competitor, threatened to leave China, which reflects that Google lost patience with its business in China.
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| LIHUA (LIWA) – POSITIVE EXTERNAL ENVIRONMENT – BUY |
2/18/2010 |
LIWA is the largest provider of copper wire when measured by gross profits. Larger than the market leader in terms of revenues, Jinda (SS: 600577).
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| YUCHENG (YTEC) -- DEFAULT EVENT DROVE PRICE CLOSE TO TANGIBLE BOOK VALUE -- BUY |
2/9/2010 |
A default case ruined YTEC’s 4Q09 financial results, but we believe that kind of event will not be repeated.
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| SOHU - MEDIA BUSINESS UNDERVALUED - UPGRADE TO BUY |
2/4/2010 |
Almost all Sohu’s public comments focus on its game business, but we believe the ad business will provide the most important growth momentum in next two years.
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| LIHUA INTERNATIONAL (LIWA) - PLAY ON CONTINUED WHITE GOODS GROWTH IN CHINA - SITE VISIT REPORT - BUY |
2/2/2010 |
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We met with LIWA’s management and visited its facility in Danyang on January 22. |
| CLEAR MEDIA - PROFIT WARNING FOR 2009, BUT RECOVERING SIGNALS FOR 2010 - INITIATE WITH BUY |
1/6/2010 |
CCTV (China Central Television), the flagship of China media, gained a record high contract value for 2010, which signals a recovery for China’s media industry.
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| SHANDA - NO. 1 POSITION WAS REPLACED - DOWNGRADE TO SELL |
12/10/2009 |
Shanda’s No. 1 position in the China game market was replaced in 3Q09 and among the top five game operators in China, Shanda was the only company whose market share declined.
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| FOCUS MEDIA - CANNOT BREAKEVEN IN 2010 - SELL |
12/10/2009 |
We believe, in 2010, Focus Media will not be able to breakeven even without impairments; however Focus Media will be forced to continue to dispose subsidiaries.
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| GIANT - BUSINESS RESTRUCTURING WILL TAKE TIME - DOWNGRADE TO SELL |
12/1/2009 |
Both the number of players and ARPU (Average Revenue Per User) decreased in 3Q09 due to the close of “Treasury Box”.
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| AIRMEDIA (AMCN) – COVERAGE CLOSE |
12/1/2009 |
| AIRMEDIA (AMCN) – COVERAGE CLOSE |
| VISN - CHINA AD RATES RISE - NEW MEDIA BENEFITS FROM JAN 1ST REGULATIONS RESTRICTING AMOUNT OF TV ADS - BUY |
11/30/2009 |
The record high contract values in the CCTV Ad Auction signals recoveries for China’s media industry and economy in 2010.
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| SINA - CHINA REGULATORY CHANGE WILL DRIVE AD SPEND TO OTHER MEDIA - BUY |
11/24/2009 |
Advertisers will have to transfer part of their budgets from TV to other media due to the restrictions of “No. 61 Policy” coming into force Jan. 2010.
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| TENCENT - REPLACES SHANDA AS NO. 1 GAME OPERATOR IN CHINA - UPGRADE TO BUY |
11/19/2009 |
Tencent’s competitors have not yet released their 3Q results, but we’ve learned from multiple local sources that Tencent became the largest game operator in China in place of Shanda (Nasdaq: SNDA).
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| LI NING (2331.HK) – LEADING SPORTS BRAND IN CHINA IS CURRENTLY UNDERVALUED COMPARED TO PEERS - BUY |
11/16/2009 |
Li Ning’s stock price has appreciated 91% year-to-date, much less their competitors
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| ZHONGPIN (HOGS) - DON'T SELL ON GUIDANCE REDUCTION, PRICE COULD DOUBLE -- MAINTAIN BUY |
11/12/2009 |
The guidance reduction in 3Q release should not be a major concern.
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| CHINA TELECOM (CHA) - ENCOURAGING OPERATING DATA IN 3Q09 - BUY |
11/9/2009 |
Mobile subscribers continued to rise rapidly by about 6% month over month in 3Q09.
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| CHINA UNICOM - SMUGGLED IPHONE PRICES RECOVERING, WEAK 3Q - SELL |
11/5/2009 |
In the mobile business, ARPU declined 2.8% QOQ and MOU rose 1.6% QOQ in 3Q09.
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| VISION CHINA -- WON ADVERTISERS IN PRICE WAR, ACQUISITION WILL ADD VALUE - MAINTAIN BUY |
11/5/2009 |
After the acquisition of DMG, VISN will have a market share of 60% in the China mobile TV market and the 99% in China subway mobile TV.
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| CHINA MOBILE - LOWERING PRICES TO GAIN MARKET SHARE, BUT THE STOCK IS OVERSOLD - UPGRADE TO BUY |
10/29/2009 |
CHL is attracting subscribers with price cuts, but the competition still pulled down revenue.
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| BAIDU - CLOSE OF CLASSIC EDITION WILL IMPACT Q4 RESULT - HOLD |
10/29/2009 |
Baidu will close the classic edition of the online marketing business, which will negatively impact the 4Q financials.
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| RAFFLES EDUCATION - WELL-POSITIONED & GEOGRAPHICALLY DIVERSE COMPANY IN A REBOUNDING SECTOR - BUY |
10/15/2009 |
We believe that the stock should trade at 20x, half the multiple of the peer group, which represents an upside of 64% - BUY
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| AJISEN - CONTROL COSTS WELL - UPGRADE TO BUY |
9/28/2009 |
We assume the operating margin will be stable in 2010, as the
Company slows down its site expansion and controls the payroll well.
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| FMCN - MORE DISPOSALS AND WEAKNESS IN RENEWALS - MARKET IS WRONG - SELL |
9/24/2009 |
FMCN will dispose part of the internet division, which means the Company’s restructuring has not yet ended.
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| SNDA - UNDERPERFORMANCE BRINGS SHARE PRICE TO LEVEL REFLECTING SLOWDOWN - UPGRADE FROM SELL TO HOLD |
9/14/2009 |
Shanda’s shares have underperformed and fallen to our last target.
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| SINA - Acquisition Delay a Postive - 2010 Upside - BUY |
9/9/2009 |
Delay or cancellation of the out-of-home network acquisition may not be bad news. We believe revenues will grow and the operating margin will improve in 2010.
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| CHU - Overvalued - Strategically Flawed - SELL |
9/8/2009 |
CHU will have a lower operating margin, lower EPS, and negative cash flow in 2010 due to an aggressive CAPEX budget.
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| CHA - Cheapest of the Chinese Telcos - BUY |
9/8/2009 |
We assume the operating margin can improve to 17% in 2010 versus 14% in 2009. The Company controls CAPEX well and we believe CHA will reduce its mobile subsidies and its mobile advertising budget in 2010.
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| CMB - Results Weak - Fully Valued - HOLD |
9/8/2009 |
China Merchants Bank (CMB) reported a 37.6% y-o-y decline in net profit for 1H09. Net interest income contracted by 22.8% y-o-y due to the faster decline in earnings yield against cost of funding. Upcoming rights issue will hurt the shares
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| CHINA RAILWAY CONSTRUCTION (1186.HK) - STRONG GROWTH UNSUSTAINABLE - SHARES OVERPRICED - HOLD |
9/3/2009 |
We believe the revenue growth will slow down, because the stimulus package supported growth is not sustainable.
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| BEIJING AIRPORT - SOME RECOVERY BUT FULLY VALUED - HOLD |
9/1/2009 |
We believe net revenues will grow 11% in 2009 and 19% 2010.
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| CHINA CONSTRUCTION BANK (939.HK) - STRONG 1H09 RESULTS - UPGRADE TO BUY FROM HOLD |
8/28/2009 |
China Construction Bank (CCB) reported a 4.9% y-o-y decline in net profit to RMB55,806m in 1H09, better than market expectations.
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| CHINA MOBILE - SLOWER GROWTH AND DECLINING METRICS - HOLD |
8/26/2009 |
CHL’s total revenues grew 8.9% YOY in 1H09 compared to 9.2% YOY in 1Q09 and 15.5% YOY in 2008.
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| GIANT (GA) - REGULATORY CHANGES HURT GAMING CO.'S OUTLOOK - HOLD |
8/26/2009 |
The Ministry of Culture restricted the usage of virtual currency, so that GA has to cancel the “Treasury Box” function, which was the most profitable function in the most important game, ZT Online.
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| BYD - INITIATING COVERAGE WITH A SELL RATING DUE TO STRETCHED VALUATION |
8/20/2009 |
BYD is a leading Chinese player in the battery and mobile handset markets with reasonable presence in the auto segment. The company has evolved from being solely a handset component manufacturer to a diversified entity.
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| TENCENT - CHINESE ONLINE COMPANY POSTS STRONG GROWTH - FULLY VALUED - HOLD |
8/19/2009 |
Tencent’s revenue increased 15% QOQ in 2Q09, (Exhibit 1) which was better than our estimate and Reuters analyst consensus.
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| YUCHNG - HEADCOUNT INCREASING MARGINS SET TO IMPROVE - BUY |
8/18/2009 |
| YTEC hired about 150 software engineers in 1H09 and is going to hire about 150 solution engineers in 2H09. |
| VISN - Price War Dampens Outlook and Stock - Short-term Pressure - Maintain BUY |
8/12/2009 |
| Towana, VISN’s main competitor, launched a price war in order to sell itself at a higher offer price. VISN reduces outlook for revenues and profits. We do not believe Towana will be able to maintain a low rate card for a long time...BUY |
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