Looks like we had a warning that the short-message-service mobile technology has temporarily evened off in China and that let to a wave of profit taking. I might pick up a few more shares tomorrow.
Chinese Internet Stocks Sag by Meredith Derby 10/21/2003
thestreet.com
Shares of Chinese Internet stocks Sohu.com (SOHU:Nasdaq - commentary - research), Sina.com (SINA:Nasdaq - commentary - research) and Netease.com (NTES:Nasdaq - commentary - research) were slipping following a research note from Piper Jaffray on Tuesday.
Piper Jaffray said the growth of short-message-service mobile technology has temporarily evened off in China. After the note, Sohu.com was down $2.67, or 7.5%, at $32.84, while Sina.com was down $3.68, or 8.9%, at $37.78. Netease.com was down $6.50, or 9.6%, at $61.05.
SMS is still very strong in China, but some "minor issues" have hurt its growth rate in the third quarter, according to Safa Rashtchy, senior research analyst at Piper Jaffray. China Mobile (CHL:NYSE ADR - commentary - research), the country's main mobile phone company, reported Monday that SMS growth was significantly below the prior quarter, Rashtchy said.
But the analyst remained optimistic on the three companies, noting that China Mobile's data were based on overall SMS messages, most of which are peer-to-peer, rather than the value-added services that Sohu.com and the other companies provide.
The analyst also believes that advertising revenue will be strong in the quarter and that any shortfalls in SMS revenue will be offset by advertising sales. Rashtchy forecast an in-line quarter for Sohu.com, which will release results on Oct. 23. Analysts are calling for a profit of 17 cents a share.
Rashtchy concluded: "Given the continuing data showing strength of the Chinese economy and the Internet market there, we remain confident that the long-term opportunity for Sohu.com and other portals is very large." |
