LightInTheBox Forecast Sinks Vipshop: China OvernightMatthew Kanterman
LightInTheBox Holding Co. plunged 23 percent, leading declines among Chinese stocks traded in New York, after the online discount retailer’s sales forecast trailed analyst estimates.
The Bloomberg China-US Index of the most-traded Chinese stocks in the U.S. dropped 0.3 percent to 107.75. LightInTheBox sank to the lowest since its June U.S. offering and online apparel retailer Vipshop Holding Ltd. tumbled 5.6 percent. Wealth management company Noah Holdings Ltd. fell for a second day while NQ Mobile Inc. rose the most in a week after Oberweis Asset Management Inc. said it doubled its stake in the mobile-service provider.
Fourth-quarter revenue will rise to between $75 million and $77 million, Beijing-based LightInTheBox said in a statement yesterday. That was below the $83.1 million mean estimate of four analysts compiled by Bloomberg. The world economy will probably expand 2.7 percent this year and 3.6 percent next year, instead of the 3.1 percent and and 4 percent predicted in May, the Organization for Economic Cooperation and Development said yesterday.
LightInTheBox’s model is based on exports, “but the economy in the last four years has been pretty shaky internationally,” Henry Guo, an analyst at ABR Investment Strategy LLC, said by phone yesterday from San Francisco. “The company’s earnings were kind of disappointing.”
LightInTheBox slumped to $7.68, the biggest decline on the Bloomberg China-US gauge. Trading volume was more than double the daily average of the last 90 days. Vipshop, based in Guangzhou, retreated to $81.61 in the biggest drop in three weeks.
Traders sold stocks of Chinese online retailers without seeing the difference between those with an overseas customer base like LightInTheBox and companies, such as Vipshop, that serve a domestic market, Guo said.
The iShares China Large-Cap ETF, the nation’s biggest U.S.- listed exchange-traded fund, gained 0.2 percent to $39.88 in New York, the highest in nine months. The Standard & Poor’s 500 Index fell 0.2 percent after disappointing forecasts from Best Buy Co. and Campbell Soup Co.
Hollysys Automation Technologies Ltd., a maker of automation systems, climbed 9.7 percent to $17.70, a record high. Adjusted earnings rose 30 percent to 35 cents a share, the company said in a statement Nov. 18.
Noah Holdings tumbled 7.9 percent to $20.78. Ten-day volatility on the stock increased to 111.8, the highest since Sept. 6.
NQ Mobile, the company accused of inflating revenue by short-seller Carson Block’s Muddy Waters Research LLC last month, climbed 3.6 percent to $13.37. Oberweis doubled its stake in the company to 1.8 million American depositary receipts, making it the second-largest shareholder, Jim Oberweis, the company’s president, said in a phone interview on Nov. 18.
The first sentence of the 81-page report by Muddy Waters on NQ Mobile on Oct. 24 said: “NQ is a massive fraud.” The report went on to say that at least 72 percent of NQ’s purported 2012 China security revenue is fictitious and that its cash balances were faked.
“I found that, step by step, most allegations made by Muddy Waters are really easy to disprove, the most important one being the cash,” Oberweis said in the interview. “The money is there and this illusion that there is no cash is completely false.”
Renren Inc., the operator of a real-name social networking website, dropped 3.5 percent to $3.30, the most in three weeks. Alvin Chiang resigned as chief marketing officer, the Beijing-based company said in a regulatory filing.
China Life Insurance Co., the country’s biggest insurer, rallied for a fourth day in New York, jumping 3.7 percent to a nine-month high of $47.13.
China International Capital Corp. analyst Shengbo Tang raised the Hong Kong-listed stock to the equivalent of a buy from hold. The stock will gain 32 percent, according Tang’s price estimate of 25.20 yuan ($4.14).
The preliminary reading for a Purchasing Managers’ Index, an index of manufacturing released by HSBC Holdings Plc and Markit Economics today, will slip to 50.8 from 50.9 in October, according to the mean estimate of 15 economists compiled by Bloomberg.
The Hang Seng China Enterprises Index in Hong Kong advanced 0.5 percent to 11,365.45, the highest since March. The Shanghai Composite Index of domestic shares declined 0.2 percent to 2,193.13.