Tag Archives: vips

Baidu Advised To Pull A Google And Split Core, Noncore Businesses

Baidu ( BIDU ) stock jumped Friday and the China search leader got at least one upgrade after the company said its mobile business was gaining traction, in posting Q4 earnings that beat views. The company’s revenue guidance for the current quarter, however, fell short, and the slowing China economy has taken a toll on most of China’s Internet stocks. Baidu stock, though, was up more than 9% in midday trading in the stock market today , near 173, its highest price since early January. Baidu stock has risen 73% since late August but has declined 16% in the past 12 months. Other China stocks also rose on Friday. Alibaba Group ( BABA ) and JD.com ( JD ) were up nearly 1% and 1.5% in midday trading, while Vipshop Holdings ( VIPS ) and NetEase ( NTES ) were up a fraction. Summit Research analyst Henry Guo upgraded Baidu stock to buy from hold on Friday and raised his price target to 195 from 169. “We are not so enthusiastic about Baidu’s December-quarter revenue results and March-quarter revenue guidance; however, we are deeply impressed by the strong margin expansion the company achieved in the December quarter,” wrote Guo in an industry note. “Strong momentum” in mobile defined the quarter, he said. Mobile contributed 56% of total revenue in Q4, up from 50% in Q3. Mobile search users rose 21%, he said, while the Baidu Wallet mobile payment service saw activated accounts soar 183% to 53 million. Baidu Wallet competes with Alibaba’s Alipay. Negatives included a 10.9% decline in advertising customers from Q3, Guo said, fallout from Baidu’s deconsolidation with major Chinese online travel agency Qunar ( QUNR ). To continue its growth, Baidu should follow in the footsteps of Alphabet ( GOOGL )-owned Google “and split its non-core businesses from its core search and ads business. If they do this, Baidu stock would likely receive a big boost leaving them with the cash to make a foray into the U.S. market,” Taiwan-based Sephi Shapira, CEO of mobile advertising platform MassiveImpact, told IBD via email. Baidu Investing In Self-Driving Cars, More Like Alphabet, Baidu is investing to develop self-driving cars and other technology not related to its core search operations. In November, Baidu announced it had submitted an application for a direct-banking license in partnership with China’s Citic Bank and for an online insurance license in partnership with Allianz and Hillhouse Capital. This month, Baidu announced that the company has received a nonbinding proposal from two Baidu executives to acquire the company’s fast-growing Qiyi video wing for $2.8 billion. The nonbinding proposal came from Baidu CEO Robin Yanhong Li and Qiyi CEO Yu Gong, Baidu said. The pair have proposed acquiring all of the outstanding shares of Qiyi owned by Baidu, based on an enterprise valuation of $2.8 billion. Should the deal be approved by a special committee formed by Baidu to review the offer, Qiyi will remain a strategic partner but will be independent. Baidu owns 80.5% of Qiyi’s total outstanding shares. As the company offered discounts to win more online-to-offline (O2O) customers, Baidu’s spending also rose. Selling, general and administrative expenses rose 28% year over year to RMB 4.528 billion ($699 million), mainly due to an increase in promotional spending for its transaction services. Last June, Baidu announced it would invest $3.2 billion during the next three years to bolster its lineup of O2O by fortifying group-buying website Nuomi, which Baidu acquired for $160 million in 2014. Baidu has emphasized that big upfront spending to establish its O20 business will pay off because its vast abilities in search will eventually translate to revenue from business commissions. The O2O business model aims to attract customers online and then direct them offline to make purchases at physical stores and to services including health care and food delivery. In October, Baidu-backed Qunar announced a share swap with Ctrip.com ( CTRP ), another leading Chinese online travel agency, in October. Ctrip and Qunar together have a majority of the China hotel and air ticket market. In Q4, Baidu revenue rose 33% year over year in local currency to $2.88 billion, or RMB 18.69 billion. Analysts polled by Thomson Reuters had expected  RMB 18.54 billion. For Q1, Baidu guided to revenue of RMB 15.41 billion ($2.37 billion) to RMB 15.97 billion ($2.46 billion)., up 21% to 25.5% in RMB.

Vipshop Forecast Soft, Raising Concerns About Slowing China Economy

China e-commerce company Vipshop Holdings ( VIPS ) reported strong fourth-quarter earnings but shares fell as first-quarter guidance fell short. The Q1 shortfall reflects economic uncertainties in China and elsewhere as well as competitive pressures from Alibaba ( BABA ) and JD.com ( JD ),  China e-commerce companies. Late Wednesday, Vipshop reported revenue of $2.15 billion, up 65% in local currency year over year. Vipshop posted a 58% increase in the number of active users to 19.8 million and a 67% increase in total orders of 65 million. Earnings per share minus items of 18 cents rose 66% in local currency, beating the consensus estimate of 16 cents. Vipshop stock was down nearly 12%, near 11, in early afternoon trading in the stock market today . JD stock was down 3.5%, near 24.75. Alibaba was down 1.6%, near 66.17. Vipshop expects Q1 revenue to rise 37% to 43%, but analysts expected 44% growth. Last year’s Q1 revenue doubled from the year-earlier quarter. It did not provide an earnings forecast. “Longer term, we remain optimistic on the discount retailing market and continue to believe in Vipshop’s strategic value in the space, which is mainly driven by the company’s merchandising capability and large scale,” wrote Summit Research analyst Henry Guo in a research note. China online gaming company NetEase ( NTES ) reported Q4 earnings late Wednesday that topped forecasts, but its profit margin disappointed and NetEase stock was down 16%, near 134. China Economy An Issue For Vipshop, Others The decline in China Internet stocks come as worries grow about a slowing economy and concerns of Chinese government restrictions on trading. The Shanghai composite, China’s benchmark index, fell 6.4% Thursday. The Shenzen composite, roughly equivalent to the Nasdaq, fell 7.3%. China search leader Baidu ( BIDU ) is set to report earnings after the close Thursday, with analysts looking for guidance on China’s ad market amid an economic slowdown. Baidu stock was down nearly 4%, near 157, Thursday afternoon. Baidu this month announced that it had received a nonbinding proposal from two Baidu executives to acquire the company’s fast-growing Qiyi video unit for $2.8 billion. JD is slated to report Q4 earnings before the market open on Tuesday. The focus is expected to be on JD’s push into online-to-offline (O2O) retailing and other new businesses. JD is banking on its O2O business to help it compete in China’s burgeoning e-commerce arena vs. China e-commerce leader Alibaba and others. Tencent Holdings ( TCEHY ), China’s leader in messaging and gaming, is set to report earnings before the market open March 17. It’s traded in the U.S. over the counter. Tencent, Alibaba, JD and Baidu are the four largest Internet companies in China. On Jan. 28, Alibaba reported earnings for its fiscal third quarter ended Dec. 31 that topped Wall Street expectations. Vipshop is an online discount retailer that sells branded apparel, accessories, home goods and other lifestyle products. It specializes in so-called flash sales, in which a set number of goods are sold over a limited time. “As we diversify our product offering and further enhance the customer experience, we are confident in our ability to drive further growth and value for investors,” Vipshop CEO Eric Shen said in the company’s Q4 earnings release . Vipshop spotlighted its strength in mobile, which accounted for 82% of the total value of goods sold on its website, up from 66% in Q4 2014. It said orders for Vipshop’s core flash sales business jumped 126%. Strong growth in customers and orders in the quarter “implies strong brand awareness among consumers, despite increasing competition in flash sales category from Alibaba and JD.com,” wrote Guo.

3 Big-Name Chinese Tech Stocks Rebound Ahead Of Earnings Reports

Loading the player… Earnings season continues this week with three big-name Chinese tech companies reporting: Vipshop ( VIPS ), NetEase ( NTES ) and Baidu ( BIDU ). Here’s what you need to know. Flash-sales site Vipshop is slated to issue its results after the close on Wednesday. Earnings are expected to grow 43% in local currency on a 46% rise in revenue. Vipshop is trying to rebound from recent lows. The stock rose 3.3% in big volume Monday, nearing its downward-sloping 50-day moving average. Vipshop gapped down below that level after issuing its preliminary results last quarter. NetEase also reports after the close on Wednesday. It’s projected to grow earnings by 52% in local currency, while revenue is seen jumping 121%. With a highest-possible IBD Composite Rating of 99, the gaming company is a member of the IBD 50 list of leading stocks. NetEase is working on a consolidation base with a 186.55 buy point, up 4% to 160.08 Monday. The stock is nearing its 50-day line and is trading about 14% below the pivot. China search giant Baidu is expected to see earnings fall 27%, with revenue rising 32% in local currency, when it reports after the close on Thursday. Earlier this month, Baidu said it had received an offer from two executives to buy its 80% stake in online video platform iQiyi in a $2.8 billion deal. Baidu recently tripped a bearish signal when its 50-day line crossed below its 200-day line. But the stock has risen five out of the last six  sessions, including a 2.55% advancen Monday. It’s currently trading about 25% below its 52-week high. And next week, Alibaba ( BABA ) e-commerce rival JD.com ( JD ) are both slated to report their results.