AsiaInfo Leads Drop on Slower Growth Concern: China Overnight

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Chinese stocks traded in the U.S. fell for a third day, led by a plunge in telecommunications software provider AsiaInfo-Linkage Inc., after manufacturing weakened more than analysts expected in the world’s second-largest economy.

The Bloomberg China-US 55 Index dropped 1.3 percent to a five-day low of 98.48 at the close of trading in New York. AsiaInfo-Linkage plunged 22 percent to $7.81, the biggest slump in three months. The company provided fourth-quarter forecasts on Oct. 31 that missed the median estimate of analysts surveyed by Bloomberg. Renren Inc. led declines in Internet stocks, and Suntech Power Holdings Ltd. lost the most among solar companies as European banks is cutting credit lines for solar power developers in the world’s largest market for the technology.

“The outlook for AsiaInfo’s growth in the fourth quarter and also in 2012 is very weak because big Chinese telecom operators cut investments,” Kun Tao, an analyst at Roth Capital Partners, in Newport Beach, California, said by phone. “Rising labor and research costs rate will continue to squeeze its profit margins.”

All but six of the 55 most-traded U.S.-listed Chinese companies fell after the government said yesterday the Purchasing Managers’ Index for October dropped to the lowest level since February 2009, missing economists’ median forecast. Inflation stayed above 6 percent for a fourth month in September, and Premier Wen Jiabao said last week stabilizing prices remained the government’s top priority, while economic policies will be “fine-tuned” as needed to support growth.

Recommendation Cut

The ishares FTSE China 25 Index Fund, the biggest Chinese exchange-traded fund in the U.S., fell 1.5 percent to $35.51 after rising 17 percent last month. Most companies in the Shanghai Composite Index fell yesterday, while the index was little changed at 2,470.02.

Tao at Roth Capital cut his recommendation on AsiaInfo to “neutral” from “buy” after the company said it expected profit in the fourth quarter to be between 30 cents to 33 cents per share, compared with 35-cent mean estimate of eight analysts in a Bloomberg survey.

Beijing-based AsiaInfo said third-quarter non-GAAP net income declined 9.7 percent from a year earlier to $26.7 million, or 37 cents per share, below the 39 cents average analyst estimate. The 43.9 percent gross margin for the three months ended Sept. 30 also missed analysts’ forecast of 48.2 percent.

Suntech, Trina

Suntech Power Holdings, the world’s largest maker of solar panels, plunged 8.4 percent to $2.51 and Trina Solar Ltd., China’s largest solar panel maker by market capitalization, slid

5.1 percent to $7.66. European banks are paring short-term revolving credit lines for solar energy developers, said Ole Enger, chief executive officer of Renewable Energy Corp. and Michael Potter, chief financial officer of Canadian Solar Inc. Demand is 10 percent less than expected even after panel prices fell, Enger said in an interview yesterday in Singapore.

The Standard & Poor’s 500 Index slipped 2.8 percent, after a 11 percent gain in October, on concern that a Greek referendum pledged by Prime Minister George Papandreou may threaten Europe’s bailout. The MSCI Emerging Markets Index retreated 2.6 percent.

Renren, the Chinese social-networking site that completed an $855 million initial public offering in May, plunged 13 percent after Tencent Holdings Ltd., China’s biggest Internet company by sales, said it’s “marching to open” its site to external developers to expand its services, Chief Executive Officer Ma Huateng said at a conference in Beijing Oct. 31.

Youku, SoFun

Online video-sharing website owner Inc. and Tudou Holdings Ltd. slid after rival Inc., majority owned by Baidu Inc., said it signed an agreement with Paramount Pictures Corp. to distribute the movie “Transformers: Dark of the Moon.” Youku, China’s biggest online-video site, lost 7.9 percent, the most in a month, to $19.57. Tudou fell 5.4 percent to $15.51.

SouFun Holdings Ltd., China’s biggest real estate website owner, lost 11 percent after it said the nation’s home prices fell for a second month in October as developers started to cut prices to boost sales amid the government’s housing curbs.

Home prices dropped 0.23 percent last month from September, when they retreated 0.03 percent, SouFun said in an e-mailed statement. Prices slid in 58 of 100 cities tracked by the company, including Shanghai and Beijing, it said.

The Chinese yuan was little changed at 6.3543 per dollar in Shanghai, according to the China Foreign Exchange Trade System. The currency has gained 4 percent this year.

NetQin Mobile Inc., a Chinese mobile-phone software provider, will publish third-quarter earnings after U.S. trading today. Non-GAAP net income was probably 9.3 cents a share, according to the mean estimate of three analysts surveyed by Bloomberg. Analysts estimated sales of $10.17 million, compared with the company’s previous forecast of $10.20 million.

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