NEW YORK (TheStreet) -- Chinese web stocks SouFun Holdings (SFUN), Youku Tudou (YOKU), Sina Corp (SINA) and Qihoo 360 Technology (QIHU) dropped during Thursday's session, just some of the losers in a sell-off on U.S.-listed, China-based stocks.
Earlier in the day, Securities and Exchange Commission Administrative Law Judge Cameron Elliot ruled Chinese units of accounting firms KPMG, Deloitte & Touche, PricewaterhouseCoopers and Ernst and Young were barred from auditing U.S.-listed companies for six months. The ruling was in connection to the firms deliberately failing to give regulators audit papers for Chinese companies investigated for accounting fraud. The firms said they plan to file an appeal against the ruling.
Also hurting stocks, Chinese manufacturing data contracted for the first time in six months. China January PMI shrank to 49.6 from the previous month's 50.5.
By early afternoon, online real estate portal SouFun Holdings had plunged 8.2% to $87.06, internet TV provider Youku shed 4.8% to $31.40, social network Sina tumbled 5.7% to $72.66, and anti-virus software provider Qihoo dove 4% to $92.05.
TheStreet Ratings team rates SOUFUN HLDGS LTD as a Buy with a ratings score of B+. The team has this to say about their recommendation:
"We rate SOUFUN HLDGS LTD (SFUN) a BUY. This is driven by several positive factors, 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, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 9.1%. Since the same quarter one year prior, revenues rose by 45.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 100.00% and other important driving factors, this stock has surged by 219.43% 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, SFUN should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- SOUFUN HLDGS LTD 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. We feel that this trend should continue. During the past fiscal year, SOUFUN HLDGS LTD increased its bottom line by earning $1.87 versus $1.23 in the prior year. This year, the market expects an improvement in earnings ($3.34 versus $1.87).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet Software & Services industry. The net income increased by 108.9% when compared to the same quarter one year prior, rising from $49.17 million to $102.74 million.
- The gross profit margin for SOUFUN HLDGS LTD is currently very high, coming in at 86.10%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 55.52% significantly outperformed against the industry average.
- You can view the full analysis from the report here: SFUN Ratings Report