EJ is a complete steal. They have a ton of cash, huge stake in LEJU and a growing mobile platform. Stock is worth mid-teens now, $40 in 2 years.
Sentiment: Strong Buy
BABA made EJ insanely cheap. On March 17, 2014, the day after BABA's announcement that they would have an IPO in the USA, EJ closed down 6% to $14.08 and has never recovered.
You do realize the revenue guidance was only lowered between 4 and 6.5%, right? And those are both WORSE CASE scenarios. LEJU's revised guidance is a bit more. Granted, they should never have opened their big mouths about raising guidance in May in the first place. Granted again, earnings were a disappointment.
But judging by the way they blew their guidance, it appears they could be just as wrong on the upside if housing starts cooking in November and December. Kind of scary though, seems as if the company is less beholden to the market and more locked in to what the government does with respect to controlling the RE market.
LEJU's miss was a trifle, as was there YE rev forecast. If the price was fair going into today, the punishment does not fit the crime here at all. Remember too, most pundits feel we are at or have passed the bottom due to govt stimulation in recent months.
That's a tough call, on the one hand EJ has many more unknowns than LEJU in my opinion, but your point is a good one, at the end of the day there should be a relationship between the two in terms of share price.
Nice little bonus I'd say.
I still say if they had not raised guidance in May these numbers would not look so bad. They basically beat 2013 on all fronts. And again, 2013 was an epic year. The revision makes it look as if the business is performing poorly, which it is not. Someone raised everyone's expectations and we are being punished for that. Perhaps someone can look through the fog of war and see how well the business is really doing. Not as good as they thought it would do so obviously management did not foresee this poor of a year in general in Chinese RE. As to 2015, Zhou was positively ebullient. No specifics of course, but we will not know that if the market rebounds this business will follow and be a bit above the average.
I don't think they pushed hard enough in emphasizing how well they did in relation to last year. Course in some respects they couldn't since they had an egg on their face from their miscalculation in May.
All good points, but my main point is this, the 4th. quarter would now be expected to be down from last year, and maybe down substantially. As you state, they should have never issued that guidance back in May, the same would hold true for 2015, it's a crapshoot at this point. We have no visibility for the foreseeable future.
OK, let's spin this a bit. Number 1, they beat last year's online services and Ecom services soundly. In fact, they trounced them. An last year was an epic year in Chinese RE. The primary RE biz was down 9%, in line with the industry. Even though transactions were actually UP from last year, albeit 2%.
The guidance is still 20% AHEAD of last year. The major screw up was the guidance issued way back in May. I bet they never look that far out again. I remember when they gave that guidance the stock hardly reacted. No one believed they could look that far out, and they were right. The other negative is the spending on new programs. But they are still ahead of last year's numbers significantly. The stock has done nothing this year. It would seem investors knew this negative news was coming. Just a quick take. Going to listen to the CC now. By the way, they should fire whomever put out that raised guidance six months ago in an ambiguous market at best .
CTC, a bit player, came in light on offline transactions. Kind of a foretelling for EJ's offline biz I would imagine. Now, can Ecommerce make up for that, and, even if they do, will the street focus on the slow offline?
CTC, what a chump IR department, SFUN invested in them a couple of months ago and they did not even note that in the PR. How much they paying their PR people you gotta wonder?
That is always overlooked, venetian, the fact that this modest decline in Chinese housing prices is something the govt has wanted for years, and the fact it they are getting exactly what they wanted. The headlines this morning all raged about the drop in housing prices, while buried in the articles were notes that the price decline is lessening MOM. Yes, we never seem to catch a break. Can they hit 230m tomorrow? Who knows. And at what expense to margins? Let's hope the CC EMPHASIS is on how the market has somewhat bottomed and they spell our their new initiatives line by line. I still am expecting a "hook up" mention tomorrow. Crossing my fingers.
Seems like we never get a smooth glide into earnings. Poor October (new home prices) numbers in tonight's headlines. TH Capital this morning. Recent memories of them ahead of SFUN's report just last week. Feeling vulnerable and cognizant of how easily small caps get slammed and/or played by hedge funds. The spin factory on an insignificant data point misses the point that lower housing prices is the intention and it is modest.
Wish I could flip a switch and move forward in time when the negativity is lifted on Chinese equities. Speculative microcap biotechs fly to the moon on phase one and/or two drug "progress" (non-failure against the test design) still years from actual approval (a coin flip if it ever will) and three or four or more years away from commercialization while a profitable on-line RE service to the largest world market (trading in a trough period at modest prices) can't catch a break.