These 3 China-Based U.S. Stocks Tumbled on Tuesday

NEW YORK (TheStreet) -- Trading volume was high for China-based tech companies on Tuesday as the bears came out in full force. Bitauto Holdings Ltd (BITA), 21Vianet Group (VNET) and Nam Tai Electronics (NTE) bombed as investors flocked to exit the stocks.

21Vianet Group led the losses after the Chinese internet provider reported less-than-expected third-quarter revenue. Net income of 8 cents was on par with consensus, while revenue of $83.99 million was $30 million less than analysts surveyed by Thomson Reuters had hoped for. Management anticipates fourth-quarter revenue between $88 million and $90 million, compared to analyst expectations of $93.55 million.

Weak revenue and poor guidance rattled investors; shares fell 8.8% to $16.78 during Tuesday trading. By close, 3.2 million shares had changed hands, well over the three-month average daily trading volume of 677,787.

Fellow Chinese internet provider Bitauto Holdings followed suit, tumbling 6.5% to $32.31, with trading volume of 1.74 million shares exceeding its average daily volume of 1.31 million.

Electronics manufacturer Nam Tai shed 8.4% to $7.27, and trading volume was roughly double its average with 1.09 million shares in circulation Tuesday.

TheStreet Ratings team rates 21Vianet Group Inc as a Hold with a ratings score of C. The team has this to say about their recommendation:

"We rate 21Vianet Group Inc (VNET) a HOLD. 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, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and disappointing return on equity."

TheStreet Ratings team rates Bitauto Holdings Ltd -ADR as a Buy with a ratings score of B. The team has this to say about their recommendation:

"We rate Bitauto Holdings Ltd (BITA) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. 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, notable return on equity, reasonable valuation levels and solid stock price performance. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 9.3%. Since the same quarter one year prior, revenues rose by 38.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • BITA has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 2.56, which clearly demonstrates the ability to cover short-term cash needs.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Internet Software & Services industry and the overall market, Bitauto Holdings Ltd's return on equity exceeds that of both the industry average and the S&P 500.
  • Powered by its strong earnings growth of 115.38% and other important driving factors, this stock has surged by 360.88% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, BITA should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.

TheStreet Ratings team rates Nam Tai Electronics as a Buy with a ratings score of B. The team has this to say about their recommendation:

"We rate Nam Tai Electronics (NTE) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. 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, notable return on equity, attractive valuation levels and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company has had subpar growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • NTE's very impressive revenue growth greatly exceeded the industry average of 1.1%. Since the same quarter one year prior, revenues leaped by 61.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • NTE has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, NTE has a quick ratio of 2.25, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, Nam Tai Electronics' return on equity exceeds that of both the industry average and the S&P 500.
  • Nam Tai Electronic reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. During the past fiscal year, Nam Tai Electronic turned its bottom line around by earning $1.20 a share vs. -1 cent a share in the prior year.

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