NEW YORK (TheStreet) -- SouFun (SFUN - Get Report) stock is climbing by 4.77% to $7.14 in midday trading on Friday, as many China-based U.S. traded stocks advance after China markets posted their first monthly gain since May.
SouFun is a Beijing-based real estate Internet portal.
The Shanghai Composite Index closed October 11% higher, Bloomberg reports.
The index has rallied by 16% since this year's low on August 26, as the government intervened with a number of monetary easing policies to boost the lagging economy, Bloomberg adds. Last week, Chinese policy makers lowered the interest rate for the sixth time this year.
Additionally, baby-related stocks pushed the market higher as China ended its one-child policy on Thursday.
"The two-child policy is something that's newly confirmed from the plenum and the market hadn't fully expected that," Zhang Haidong, chief strategist at Jinkuang Investment Management, told Bloomberg.
Separately, TheStreet Ratings team rates SOUFUN HLDGS LTD as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
We rate SOUFUN HLDGS LTD (SFUN) 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 revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. 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 a generally disappointing performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 10.2%. Since the same quarter one year prior, revenues rose by 25.4%. 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.
- SFUN's debt-to-equity ratio of 0.98 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that SFUN's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.70 is high and demonstrates strong liquidity.
- The gross profit margin for SOUFUN HLDGS LTD is rather high; currently it is at 51.84%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, SFUN's net profit margin of 7.66% is significantly lower than the industry average.
- SOUFUN HLDGS LTD has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, SOUFUN HLDGS LTD reported lower earnings of $0.58 versus $0.71 in the prior year. For the next year, the market is expecting a contraction of 74.8% in earnings ($0.15 versus $0.58).
- 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 76.3% when compared to the same quarter one year ago, falling from $68.20 million to $16.17 million.
- You can view the full analysis from the report here: SFUN