NQ Mobile Tops Gains on Bolstered Sales Outlook: China OvernightVictoria Stilwell
Chinese stocks rose in New York as NQ Mobile Inc. surged to a 10-month high after raising its 2013 revenue forecast. China Lodging Group Ltd. sank the most on record as fourth-quarter profit trailed estimates.
The Bloomberg China-US Equity Index of the most-traded Chinese equities in the U.S. added 0.2 percent to 94.13 in New York. NQ Mobile, the nation’s biggest mobile-phone security company, jumped to the highest level since May 11, while Vipshop Holdings Ltd. climbed for the first time in six days. China Lodging plunged 14 percent after reporting fourth-quarter net income 36 percent below the average of four analysts’ estimates compiled by Bloomberg.
NQ Mobile raised its 2013 sales outlook yesterday to as much as $183 million from an earlier forecast of up to $155 million. The company also said March 4 that it will partner with Mexican billionaire Carlos Slim’s America Movil SAB. American depositary receipts of the Beijing-based company are poised for a 45 percent rally this week, a record jump.
“Everything seems to be clicking in the right direction,” Fred Ziegel, an analyst at Topeka Capital Markets Inc. who rates NQ Mobile buy, said by phone from Petoskey, Michigan. “Despite the big move here in the last few days, we think the stock can still more than double.”
The iShares FTSE China 25 Index Fund, the largest Chinese exchange-traded fund in the U.S., added 0.2 percent to $38.57. The Standard & Poor’s 500 Index gained 0.2 percent to 1,544.26.
NQ Mobile’s ADRs rose 14 percent to $10.01 on volume more than 11 times the daily average over the past three months, bringing its advance this year to 66 percent.
The company’s increased revenue forecast takes into account contributions from its purchase of mobile game company Beijing Feiliu Jiutian Technology Co., which was completed in November, as well as the deal with America Movil, Andy Yeung, an analyst at Oppenheimer & Co., said by phone yesterday from New York yesterday.
“It gives people a bit more confidence in terms of the Feiliu acquisition,” said Yueng, who rates NQ Mobile shares the equivalent of a buy. “In 2013 people are probably going to focus more on the execution of what they already have on the table, looking at margins.”
China Lodging, which runs the nation’s fourth-largest economy hotel chain, tumbled to $16.51, the lowest price since Jan. 3. The Shanghai-based company expects same-hotel revenue per available room to grow as much as 3 percent this year, trailing a 6 percent growth in 2012, according to the transcript of the March 6 conference call.
Huaneng Power International Inc. slipped 2.7 percent to $41.44 in a second day of declines. Sanford C. Bernstein & Co. downgraded China’s largest electricity producer to the equivalent of neutral from buy, citing slowing earnings growth as, according to a March 7 note. The company, based in Beijing, surged 77 percent in 2012, making it the second-best performer on the Bloomberg China-US gauge that year behind Qihoo 360 Technology Co. Ltd., which soared 89 percent.
ADRs of Suntech Power Holdings Company Ltd. rose 4.3 percent to $1.22, halting three days of declines. The Wuxi, China-based solar manufacturer reached a settlement with GSF Capital Pte. Ltd., an affiliated company, and Javier Romero, a former sales agent involved in a potential fraud.
Suntech has a $541 million convertible bond maturing March 15, and the resolution of the legal dispute will “potentially allow Suntech to sell those assets and address the debt issues,” Gordon Johnson, an analyst at Axiom Capital Management Inc. based in New York, said by phone. Johnson recommends selling the shares. “People are seeing this as a positive, but there’s still a lot of hurdles in our view.”
ADRs of E-Commerce China Dangdang Inc. tumbled 4.8 percent to $3.98, the biggest drop since Dec. 21. Dangdang, as China’s biggest online book retailer is known, forecast first quarter sales of 1.3 billion yuan ($209 million), trailing the average 1.5 billion yuan projected by three analysts surveyed by Bloomberg. The Beijing-based company’s ADRs have posted three consecutive months of losses.
Vipshop, an online fashion discounter based in Guangzhou, jumped 6.8 percent to $25.19, the biggest gain since Feb. 25. The stock had tumbled 11 percent over the previous five days.
The Hang Seng China Enterprises Index slid 0.4 percent to 11,311.45 yesterday, while the Shanghai Composite Index of domestic Chinese shares dropped 1 percent to 2,324.29.