Spreadtrum Tumbles on Outlook as 51Job Surges: Overnight
51job Inc. (JOBS) gained the most in 22 months as the Shanghai-based recruiting service forecast better- than-expected third-quarter profit, pushing Chinese stocks traded in New York to their best weekly performance of the year.
The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese companies in the U.S. rose 0.5 percent to 91.93, extending its advance for the week to 5.2 percent, the largest gain since Dec. 2. Spreadtrum Communications Inc. (SPRD) tumbled the most since April as the mobile chipmaker forecast third-quarter sales that trailed estimates. VanceInfo Technologies Inc. (VIT) slid the most in eight months after cutting its forecast for adjusted profit in 2012.
51job said it expects third-quarter profit of 66 cents per share on sales of as much as $58.2 million. The company said second-quarter adjusted net income was 66 cents per American depositary share on $56.7 million in sales, beating the estimate of one analyst surveyed by Bloomberg. Of the 21 companies on the Bloomberg gauge that have reported earnings since mid-July, 36 percent have beat analysts’ profit estimates.
“Expectations about the second quarter were so low that investors were pleased that the company’s reassuring outlook suggests their market is stable and hasn’t deteriorated,” Jeff Papp, a senior analyst at Oberweis Asset Management Inc., which manages $700 million and holds shares in 51job, said yesterday by phone from Lisle, Illinois. “51job’s competitive position continues to improve as they’re probably gaining some market share in the downturn.”
The iShares FTSE China 25 Index Fund, the biggest Chinese exchange-traded fund in the U.S., fell 0.2 percent to $35.23 from a three-month high. The Standard & Poor’s 500 Index of the biggest U.S. shares added 0.2 percent to 1,405.87, extending its winning streak to six days.
51job surged 20 percent to $43.84, the biggest advance since Oct. 13, 2010, on volume that was four times the stock’s three-month daily average, according to data compiled by Bloomberg.
The climate for hiring in China isn’t the same as in 2008-2009 when employers were “a little bit shell-shocked and just didn’t know what to do,” said 51Jobs Chief Operating Officer Kathleen Chien during an Aug. 9 conference call.
Spreadtrum lost 12 percent to $17.09, the largest decline since April 16. The Shanghai-based company forecast third- quarter revenue of $178 million to $186 million, below the $188 million average estimate of nine analysts surveyed by Bloomberg.
China’s exports rose 1 percent in July from a year earlier, the customs bureau said yesterday in Beijing, after climbing 11.3 percent in June.
“The overall sales data from Chinese companies hasn’t been good and earnings have been deteriorating,” Jingyi Li, an analyst at Harding Loevner LP, whose $19 billion in assets under management includes Chinese equities, said in a phone interview yesterday from Bridgewater, New Jersey. “The overall economy is slowing and the recovery will be mild. We’re not in a panic situation though the authorities there will be under pressure to take actions to stimulate.”
Beijing-based VanceInfo tumbled 11 percent to $8.85 after the company said it expects to report adjusted earnings per American depositary share between 75 cents and 81 cents, less than a previous forecast as high as 92 cents per share. The average estimate for 2012 net income was 88 cents per share, according to 11 analysts surveyed by Bloomberg.
“Vance has struggled to deliver a consistent margin profile,” said Joseph Foresi, an analyst at Janney Montgomery Scott LLC in Boston. “Revenues were actually revised upward, so the fact that they had to bring down earnings is concerning because maybe it leads to further inconsistency.”
Foresi has a neutral rating on VanceInfo. VanceInfo raised its 2012 sales forecast to $372 million to $376 million, exceeding an average analyst estimate of $369.6 million.
VanceInfo and HiSoft, which counts General Electric Co. (HSFT) and Microsoft Corp. as customers, agreed to an all-stock merger in which shareholders would each own approximately 50 percent of the combined company. HiSoft will be the surviving listed stock, and the new company will be headed by HiSoft Chief Executive Officer Tiak Koon Loh, the companies said.
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