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Today’s Top Chinese Movers

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Today’s Top Chinese Movers

China Mobile (CHL) is among today’s top gainers by market share while Changyou.com (CYOU) was among today’s top losers by percentage change.

China Mobile Ltd. [[CHL]] gained more than 3.3% in normal trading today. China’s largest cellphone company added more than $13 billion in market capitalization despite no news to report.

Changyou.com Ltd. [[CYOU]] lost more than 8.3% despite reporting excellent second quarter results today. The Chinese online game maker recently spun-off from Sohu.com [[SOHU]] reported earnings and revenue in excess of analysts’ expectations, with non-GAAP net income of $0.75 per share on a record $66.6 million in revenue. Furthermore, Citigroup reaffirmed its ‘Buy’ rating and $45 price target on the shares.

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Sohu.com’s Lowered Bar for Q2: EPS Estimated at $0.76


Sohu.com’s Lowered Bar for Q2: EPS Estimated at $0.76

Sohu.com has lowered expectations ahead of its announcements of second quarter results Monday.

Sohu.com Inc. [[SOHU]] reports second quarter results at 8:30 am EDT Monday. Here’s what to expect from the Chinese Internet information and entertainment company:

EPS: $0.76
Revenue: $123 million

This is not going to be Sohu.com’s best showing – despite revenue anticipated to grow 20% from a year ago, EPS is expected to drop 25% from $1.02 in the second quarter of 2008.

The company has a strong track record of earnings surprises – beating average estimates in four of its last four quarters, once by as much as 48%. Sohu.com may report results above consensus, but don’t be too impressed – EPS estimates have fallen from $1 to its current level of $0.76 over the last 90 days.

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Chinese Internet Stock to Benefit from Recovery

Sohu.com Inc. (SOHU) and Baidu Inc. (BIDU) could be two key beneficiaries of a Chinese economic turnaround, as strong growth rates stand to multiply the effects of a recovery.

From automobiles to real estate, China’s economic stimulus package appears to be improving many areas of its economy. While first quarter gross domestic product growth grew just 6.1%, the slowest in almost a decade, many analysts are decidedly bullish. In fact, the Shanghai stock market is up 35% so far this year, signaling a positive future outlook by investors.

One of the fastest growing industries in China, as in the Western world, is the internet sector. While China now has the world’s largest internet population, having taken over the U.S. for the title in early 2008, it still has a lot of ground to make up in terms of market maturity. Regardless, there is room for opportunity with online ad spending expected to reach $3.5 billion by 2012.

Sohu.com Inc. [[SOHU]], an online Chinese news and entertainment provider, has continued to succeed with first quarter net income more than doubling over the same period a year ago. The company was also able to effectively capitalize the value of its former subsidiary by spinning off ChangYou [[CYOU]] and retaining a 68.5% stake in its combined Class A and Class B shares.

Baidu Inc. [[BIDU]], the leading Chinese online search provider, has also seen strong growth with net income increasing by 23.5% from the corresponding period in 2008. Meanwhile, revenues jumped 41.1% and operating profit increased 34.7%. Many investors are confident that this performance will substantially increase upon any economic recovery in China.

In the end, these two Chinese internet companies continue to outperform and should be able to take advantage of the so-far-successful Chinese economic recovery.

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