NEW YORK, NY--(Marketwire -07/03/12)- Chinese Internet stocks took a hit earlier this week after numbers out of China showed manufacturing for the country grew at the slowest pace this year. The Bloomberg China-US Equity Index (CH55BN) in the second quarter dropped 11 percent, the index's worst since third quarter of 2011. The Paragon Report examines investing opportunities in the Resorts and Casinos Industry and provides equity research on SINA Corporation (SINA) and Youku Inc. (YOKU).
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There have been growing concerns that the recent slowdown in China, the world's second largest economy, would force companies to cut ad spending. On Sunday, the National Bureau of Statistics in Beijing stated that the China Manufacturing Purchasing Managers Index fell slightly to 50.2 from 50.4. If the index were to fall below 50 it would signal contraction in the manufacturing sector.
"As Chinese industrial consumption goes down, ad spending, Internet spending is also going down," Michael Ding at U.S. Global Investors, said by phone according to Bloomberg. "The impact is being felt by Internet stocks that are very sensitive to macro numbers."
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Shares of SINA hit their lowest levels since January Monday after Maxim Group LLC cut the company's revenue forecasts. "The slowing economy is starting to put pressure on online advertising budgets," Echo He, a Maxim Group analyst, said in a phone interview. "It's hard for Internet companies like Sina to grow in this environment."
Apple announced that the next versions of Apple's OS X desktop operating system and iOS mobile operating system will integrate with services from Youku Inc., China's leading Internet television company. "Ever since Youku announced the 'Year of Paike' in 2007, our slogan has been that Youku's Paike video bloggers are everywhere," said Youku CTO Jian Yao. "Thanks to our new partnership with Apple on video-sharing in iOS 6 and OS X Mountain Lion, that's now truer than ever before."
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