Dark Days Ahead For Youku.Com? (YOKU, BIDU, SOHU, LONG, RENN, DANG, AMZN, SOHU, SINA)
Shares of Youku.com (YOKU), China’s version of YouTube, are soaring 2% today, but the good times for the high-flying Chinese Internet name that has gained 40% in the past three months may be short-lived, at least in the eyes of Maxim Group. The research firm say Youku’s user growth is slowing and that incremental data may indicate weakening fundamentals.
Overall, the Chinese Internet Stocks Index is trading lower by 0.1% today. Maxim notes that while Youku’s unique monthly visitors rose to 231 million in the first quarter from 209.4 million in the fourth quarter, rivals Baidu (BIDU), the largest provider of Internet search services in China, and Sohu.com (SOHU) both reported higher growth in terms of visitors to their online video sites.
Maxim said Youku is facing intense competition from Baidu’s Qiyi.com video site and reiterated a “sell” rating on Youku with a $30 price target, well below the $48 area where the stock currently trades.
Index members are mostly higher on the day, but eLong (LONG) is down 4% a day after surging more than 50%. Renren (RENN), the Facebook of China that recently went public, appears to be finding firmer footing after some post-IPO struggles and is surging 9%. E-Commerce China Dangdang (DANG), China’s equivalent of Amazon.com (AMZN) is up 1% as are Sohu.com (SOHU) and SINA (SINA).
Investors can track the Chinese Internet Stocks Index for performance trends and a suite of other metrics at tickerspy.com.
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