China’s Renren Rises to One-Month High on Growth Optimism
bloomberg.com
By Belinda Cao - Jul 7, 2011 3:51 PM CT
Renren Inc., China’s biggest social- networking website by page views, rose to the highest level in a month in New York trading on optimism about its growth potential, as Chinese Internet stocks rebounded this month.
The company’s American depositary receipts jumped 5.9 percent to $11.33 at 4 p.m. New York time, the highest closing level since June 7. The shares have gained for eight days in a row, the longest winning streak since the company’s initial public offering May 4, when it raised $855 million.
China’s biggest U.S.-listed Internet stocks, including Baidu Inc., Sina Corp., Sohu.com Inc. (SOHU), each have bounced back at least 14 percent since mid-June following declines in the previous seven weeks. Renren’s revenue rose 47 percent in the three months through March, and may climb as much as 51 percent to $30 million in the second quarter, the company said June 20.
“Renren is benefiting from the changing overall market sentiment -- the bigger Chinese Internet names have gone up 20 to 40 percent in the past two to three weeks,” said Andy Yeung, an equity analyst at Oppenheimer & Co. in New York. “Given the large user base they have, most people are looking at what the future potential is in advertising revenues.”
Renren’s advertisers, totaling more than 200, are a small fraction of those at Baidu or Sina, Yeung said.
The Beijing-based website owner said its users rose to about 122 million at the end of May, from 117 million two months earlier. Its first-quarter loss was smaller than a year earlier as advertising sales more than doubled to $8.1 million.
Yeung maintained an “outperform” rating on the company’s shares with a 12-month target price of $12. Among the nine analysts surveyed by Bloomberg, four recommended “buy,” four were for “hold” and one said “sell.”
To contact the reporter on this story: Belinda Cao in New York at lcao4@bloomberg.net
To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net |
