51Job Down Most in 2012 as Growth Sours: China Overnight

51job Inc. and 7 Days Group Holdings Ltd. fell in New York, pushing an index of Chinese stocks in the U.S. to the lowest level in more than three months, as the companies pared sales forecasts on global economic concerns.

51job, a Shanghai-based recruiting service provider, dropped the most since September, while 7 Day Group, a hotel operator, sank to the least in 21 months. The Bloomberg China-US Equity Index of the most traded Chinese companies in the U.S. fell 0.3 percent to 98.37, the weakest close since Jan. 24.

Average sales per share for the 55 companies in the China-US index will drop in the second quarter to the weakest in two years, according to data compiled by Bloomberg. 51job forecast slower revenue growth in the three months ended June, while earnings guidance from 7 Days Group trailed analysts’ estimates. Chinese exports and imports rose less than predicted in April as the slowing economy and European debt crisis curbed trade.

51job “is one of the most economically-sensitive names in China,” Jeff Papp, senior analyst at Oberweis Asset Management Inc. in Lisle, Illinois, which manages $700 million, said in a phone interview. “With the economy still in the process of bottoming, small and medium-sized enterprises appear to be pulling back, and investors are reacting to that trend.”

The IShares FTSE China 25 Index Fund, the biggest Chinese exchange-traded fund in the U.S., lost 0.3 percent to $35.81, the lowest since April 10. The Standard & Poor’s 500 Index added 0.3 percent, while the Shanghai Composite Index of mainland stocks climbed 0.1 percent.

American depositary receipts of PetroChina Co., the nation’s largest oil producer, declined 0.3 percent to $135.91. The company’s ADRs traded 0.3 percent higher than its equivalent shares in Hong Kong.

51job Tumbles

51job sank 8.3 percent, the most since Sept. 30, to $51.30. Second-quarter sales will be between $57.2 million and $59.5 million in the second quarter, compared with revenue of $60.5 million in the first three months of this year, the company said in a statement after markets closed on May 9. Adjusted earnings per share will be between 60 cents and 65 cents, 51job said after posting net income of 71 cents for the first quarter.

Concern over China’s slowing economy is “clearly casting a shadow over enterprises in their hiring activities,” said Chief Executive Officer Rick Yan on a conference call with analysts after the earnings were released.

7 Days Group, a budget hotel operator based in Guangzhou, China, fell 5.7 percent to $10.88, the lowest close since July 2010. Sales will climb to as much as 640 million yuan ($101 million) in the three month ending in June from 546 million yuan in the previous quarter, the company said on May 9. The median forecast of seven analysts surveyed by Bloomberg was for an increase to 647 million yuan.

Trade Slowdown

Chinese imports and exports grew in April less than economists expected, fueling concern that the economy may not have recovered from the slowest growth in more than two years posted in the first quarter. Overseas shipments rose 4.9 percent from a year earlier, compared with the 8.5 percent increase that was the median estimate of 33 analysts surveyed by Bloomberg. Import growth of 0.3 percent trailed forecasts for a 10.9 percent gain.

“The risk of a hard landing is disappearing but I don’t expect much of a rebound at this point,” Tao Dong, chief regional economist at Credit Suisse AG said in an interview on Bloomberg Television from Hong Kong. “Anybody who is counting on China to have a strong rebound because of organic demand will be disappointed.”

Sales Per Share

Average revenue per share for Chinese companies in the Bloomberg China-US gauge may decline to $10.10, the lowest level since the second quarter of 2010, from $11.70 in the first three months of this year, according to data compiled by Bloomberg.

Of the 23 companies on the China-US index that have reported quarterly earnings since April 1, 10 fell short of analysts’ predictions, from Yanzhou Coal Mining Co., China’s fourth-largest producer, and China Telecom Corp., the nation’s biggest fixed-line carrier, data compiled by Bloomberg show.

China Lodging Group Ltd, another budget hotel operator based in Shanghai, climbed 1.3 percent to $12.50 in the U.S. yesterday, after posting a first-quarter adjusted loss per share that was smaller than analysts’ forecast. The shares are “fairly valued,” analysts at T.H. Capital LLC wrote in a note to clients yesterday. Analysts led by Chenyi Lu at Cowen & Co. maintained their neutral rating.

Feihe International Inc., a Beijing-based producer of infant formula, soared 49 percent, the most in three years, to $8.74 after posting first-quarter profit that beat estimates. Trading volume was 12 times Feihe’s three-month average.

Sands China Ltd., the Hong Kong-listed unit of billionaire Sheldon Adelson’s Las Vegas-based company, gained 2.3 percent to $37.89 in New York trading.

The company will list on the Hang Seng Index to become its 49th member company, effective June 4, index provider Hang Seng Indexes Co. said in an e-mailed statement yesterday.

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