SouFun Advances as Alibaba Report Boosts Internet StocksAlexandria Baca
Chinese stocks rose in New York after Alibaba Group Holding Ltd., the country’s largest e-commerce platform, posted a surge in fourth-quarter earnings that underscores the growth prospects of Internet companies.
The Bloomberg index of the most-traded Chinese stocks in the U.S. added 1.2 percent to 99.81 yesterday. Online real-estate portal SouFun Holdings Ltd. gained 7.5 percent while Internet television operator Youku Tudou Inc. rallied the most in a week. 21Vianet Group, Inc., which provides Internet data center services, posted its biggest advance in a month.
Alibaba’s revenue jumped 66 percent, according to a Yahoo! Inc. presentation April 15. China’s annual online spending may double by 2017, data from Internet consulting group iResearch show. The country’s economy expanded 7.4 percent in the first quarter, the weakest growth since September 2012, adding to speculation the government will unveil more stimulus measures.
“Alibaba clearly showed that there’s still strong growth potential in areas like e-commerce,” Jeff Papp, a senior analyst at Oberweis Asset Management Inc., which manages $1.1 billion in assets, said by phone from Lisle, Illinois. “The adoption of e-commerce in China is growing at a rate far faster than it is here in the U.S.”
The iShares China Large-Cap ETF, the largest Chinese exchange-traded fund in the U.S., gained 1.2 percent to $35.73 while the Standard & Poor’s 500 Index rose 1 percent as data showed U.S. industrial production increased more than forecast.
Alibaba’s net income attributable to ordinary shareholders more than doubled to $1.35 billion in the three months ended December, according to Yahoo, which owns a 24 percent stake in the Hangzhou, China-based company. Sales jumped as Alibaba bolsters mobile services ahead of a U.S. market debut analysts estimate could be bigger than the $16 billion raised by Facebook Inc. in 2012.
China’s annual online spending may double to 21.6 trillion yuan ($3.5 trillion) by 2017, according to iResearch, including both business-to-business and consumer purchases.
SouFun rose the most in a week to $13.67 as Goldman Sachs Group Inc. upgraded the company to buy from neutral, citing revenue growth potential. “SouFun’s top-tier city exposure and low online ad penetration suggest marketing revenue could double in the long term,” analysts led by Fei Fang wrote yesterday in a research note.
China’s expansion slowed from 7.7 percent in the fourth quarter, the National Bureau of Statistics said yesterday in Beijing. Property construction plunged while industrial production and fixed-asset investment trailed projections. The value of property sales in the first quarter fell 5.2 percent from a year earlier and unsold completed properties jumped 23 percent from a year, the statistics bureau said.
Rising risks of a deeper slowdown increased speculation that the government will expand stimulus or limit the pace of changes intended to give market forces a bigger role. E-House China Holdings Ltd., a Shanghai-based real estate company, advanced 9.2 percent to $10.99.
Youku climbed 2.4 percent to $25.17, while social networking website operator Renren Inc. gained for the first time in a week, increasing 2.8 percent to $3.35. 21Vianet added 7.3 percent to $26.10.
NQ Mobile Inc., the mobile-services provider targeted by short-seller Carson Block, declined the most in the Bloomberg gauge, slipping 2.7 percent to $12.26.
The Hang Seng China Enterprises Index of mainland stocks traded in Hong Kong added less than 0.1 percent to 10,035.96. The Shanghai Composite Index rose 0.2 percent to 2,105.12.