NEW YORK (TheStreet) -- E-House China Holdings (EJ) climbed on Friday after the company jointly announced with Tencent Holdings (TCEHY) that the latter would purchase 15% of equity interests in Leju, E-House's wholly-owned subsidiary, on a fully diluted basis for $180 million.
Tencent, a leading Chinese Internet service provider, will also subscribe additional shares in Leju's proposed IPO to maintain its 15% equity interest on a fully diluted basis. The companies expect the deal to close by the end of March.
E-House was rising 4.47% to $13.68 at 10:15 a.m. on Friday, while Tencent was climbing 4.03% to $75.32.
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TheStreet Ratings team rates E-HOUSE CHINA HOLDINGS -ADR as a "hold" with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate E-HOUSE CHINA HOLDINGS -ADR (EJ) 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, largely solid financial position with reasonable debt levels by most measures and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company's return on equity has been disappointing."