Aug. 26 (Bloomberg) -- Noah Holdings Ltd., a Chinese wealth-management company, sank 17 percent in New York after JPMorgan Chase & Co. downgraded the stock amid a weaker outlook.
American depositary receipts of Noah dropped the most in two months to $13.76 at 3:26 p.m. in New York, trimming this year’s rally to 136 percent. Trading volume was five times the 90-day average, according to data compiled by Bloomberg.
JPMorgan cut Noah to neutral from the equivalent of buy, citing the prospects for softer product sales in the second-half of this year. The Shanghai-based company lifted its 2013 net income forecast earlier this month and said second-quarter profit jumped 133 percent. The stock traded at 12.8 times estimated earnings after valuation surged to a multiple of 22 on Aug. 12, the highest level in two years.
“The structural story is increasingly reflected in valuations and would wait for better entry points on the stock,” JPMorgan analysts led by Joshua Klaczek wrote in a note dated Aug. 23. The stock is “somewhat of a show-me story in second half, given recent volatility.”
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