LightInThe Box Rallies as Voume Surges on Sales ForecastBelinda Cao
LightInTheBox Holding Co. rallied the most on record in the U.S. as trading volume surged after the Chinese online retailer increased its sales forecast for the second quarter.
The American depositary receipts jumped 26 percent yesterday to the highest since April 3. 58.Com Inc., which operates a Chinese classified advertisement website, rose as Tencent Holdings Ltd. agreed to buy a 19.9 percent stake in the company. The Bloomberg China-US Equity Index advanced 0.3 percent to 105.73. The gauge has declined 0.3 percent this year.
LightInTheBox, which sells Chinese-made goods to customers overseas, said it expects to post second-quarter revenue ranging from $86 million to $88 million, compared with a previous forecast of no more than $86 million. Tencent, China’s biggest Internet company by market value, will invest $736 million in 58.com, purchasing ADRs for $40 apiece, and the two companies will use each other as the preferred partner in local services, according to their joint statement.
“People are probably buying LightInTheBox on the guidance lift, given its low valuation,” Ella Ji, an analyst at Oppenheimer & Co. in New York, said by phone. “Tencent’s big social media platform on mobile devices should help 58.com to increase users, so the deal makes sense for 58.com and that’s probably why it sold the shares to Tencent at a cheaper price than current market level.”
58.com gained 5.1 percent to $54.90 as trading volume increased to more than four times the full-day average of the past three months. LightInTheBox advanced to $6.42 on 14 times average volume. The Web retailer’s ADRs have slid 21 percent this year, compared with a 125 percent surge in online fashion retailer Vipshop Holdings Ltd. and a 34 percent rally in E-Commerce China Dangdang Inc.
The iShares China Large-Cap ETF, the largest Chinese exchange-traded fund in the U.S., slumped 0.2 percent to $37.21. The Standard & Poor’s 500 Index rose 0.2 percent.
The Hang Seng China Enterprises Index slid 0.8 percent in the week to 10,307.51. The Shanghai Composite Index advanced 0.5 percent to 2,036.51.