The Shanghai Composite fell 6.86% and the Shenzhen Composite plunged 8.18%, CNBC.com reports.
This action comes after the world's second largest economy saw its manufacturing purchasing managers index drop to 48.2 in December from 48.6 in November, adding to investors' concerns about the country's economic health, MarketWatch said.
Consequently, the Dow Jones industrial average briefly dropped by more than 450 points in mid-morning trade today, on track for its largest percent decline on the first trading day of the year since 1932, CNBC.com said.
Based in Beijing, Youku Tudou operates as an Internet television company in the People¿s Republic of China. Its Internet television platform enables users to search, view, and share video content across various devices
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate YOUKU TUDOU INC as a Hold with a ratings score of C. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 15.0%. Since the same quarter one year prior, revenues rose by 48.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Although YOKU's debt-to-equity ratio of 0.06 is very low, it is currently higher than that of the industry average. Along with this, the company maintains a quick ratio of 2.63, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for YOUKU TUDOU INC is rather high; currently it is at 51.50%. Regardless of YOKU's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, YOKU's net profit margin of -23.18% significantly underperformed when compared to the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet Software & Services industry. The net income has significantly decreased by 98.9% when compared to the same quarter one year ago, falling from -$32.75 million to -$65.14 million.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Internet Software & Services industry and the overall market, YOUKU TUDOU INC's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: YOKU