Bloomberg News

Housing Prices Boost SouFun as Huaneng Tumbles: China Overnight

August 19, 2013

Chinese real-estate companies advanced in New York after the biggest increase in new home prices since 2011 boosted the industry’s outlook. Huaneng Power International Inc. (HNP:US) tumbled the most in four years.

The Bloomberg China-US Equity Index of the most-traded Chinese stocks in the U.S. was little changed at 96.4 yesterday as 24 companies rose and 29 fell. SouFun Holdings Ltd. (SFUN:US), China’s biggest property market information website, jumped 11 percent. Digital map provider AutoNavi Holdings Ltd. soared to a two-year high, and NetEase Inc. (NTES:US) climbed after saying it started a new instant messaging application. Huaneng fell the most since 2008.

Guangzhou and Shenzhen led the nation’s gains in new home prices in July with a 17 percent jump, official data showed yesterday. China will seek “stable and healthy” development of the property market, policy makers said after a meeting last month led by President Xi Jinping, who took over the helm earlier this year. Huaneng, China’s largest electricity producer, followed Hong Kong shares lower after the Chongqing Times reported China may cut power prices as soon as October.

“It looks like there’s some relaxation in China’s property price curbs, which stoked home prices and will help with macroeconomic stabilization as well,” Tan Chiheng, an analyst at Granite Point Capital Inc. (PTCI:US), which invests in Chinese equities, said by phone from Boston. “SouFun and E-House both reported strong second-quarter financial results and gave strong guidance for the third quarter.”

The iShares China Large-Cap ETF (FXI:US), the largest Chinese exchange-traded fund (FXI:US) in the U.S., slipped 0.3 percent to $36.06. The Standard & Poor’s 500 Index dropped 0.6 percent as energy shares declined and investors awaited signals this week on the Federal Reserve’s stimulus plans.

Net Income

SouFun’s American depositary receipts climbed to $40.26, jumping the most since Aug. 8. Brokerage E-House China Holdings Ltd. (EJ:US) gained 3 percent to $6.25, the first rally in three days.

Beijing-based SouFun said Aug. 8 net income in the second quarter jumped 67.5 percent and sales grew 48.6 percent, while raising its 2013 sales forecast. Shanghai-based E-House reported second-quarter adjusted profit on Aug. 16 that was more than double the average projection of analysts surveyed by Bloomberg.

Prices in 69 out of a total 70 cities tracked by the government climbed last month from a year earlier, increasing 14 percent in Beijing and Shanghai, according to a statement of China’s statistics bureau yesterday. The government is expected to release a “long-term mechanism” for stable and healthy development in about three months, the official Xinhua News Agency reported on Aug. 15, citing Zhu Zhongyi, the deputy head of the China Real Estate Industry Association.

Instant Message

NetEase, owner of a news portal, rallied 5.5 percent to $67.04 in New York, the biggest gain in three months.

The Beijing-based company said yesterday it established a joint venture with China Telecom Corp., the nation’s third-largest mobile network carrier, and started YiChat, an instant message application for smartphones.

AutoNavi, which provides Chinese online map content to companies from Apple Inc. to Sina Corp., soared 8.4 percent to $15.75, the highest since August 2011.

Alibaba Group Holding Ltd., China’s biggest e-commerce company, bought a 28 percent stake in Beijing-based AutoNavi in May for $294 million.

ADRs of Beijing-based Huaneng tumbled 9.7 percent to $39.23, the first decline in four days. The ADRs, each representing 40 underlying shares in the Beijing-based Huaneng, traded 1.2 percent (HNP:US) below its Hong Kong stock, which plunged 9.4 percent to HK$7.70, or 99 cents per share.

LightInTheBox Plunges

China may cut prices of electricity to stimulate industrial power use as coal prices continue to decline, the Chongqing Times reported, citing unidentified people who are close to the nation’s top planning agency.

LightInTheBox Holding Co. (LITB:US), a Beijing-based web retailer that sells lifestyle goods to overseas markets, tumbled 34 percent in after-hour trading after its third-quarter sales forecast trailed the mean estimate of four analysts compiled by Bloomberg.

Vipshop Holdings Ltd. (VIPS:US), a web retailer of fashion goods, climbed 8.3 percent to $43.21, the biggest one-day gain since May. Qihoo 360 Technology Co. (QIHU:US), operator of China’s second most-used search engine, rallied 5.8 percent to a record $73.47, taking a two-day advance to 17 percent.

The Hang Seng China Enterprises Index slipped 0.2 percent to 10,199.08 after a six-day rise. The Shanghai Composite Index (SHCOMP) advanced 0.8 percent to 2,085.60, gaining the most in a week.

To contact the reporter on this story: Belinda Cao in New York at lcao4@bloomberg.net

To contact the editor responsible for this story: Tal Barak Harif at tbarak@bloomberg.net


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Companies Mentioned

  • HNP
    (Huaneng Power International Inc)
    • $46.1 USD
    • 0.05
    • 0.11%
  • SFUN
    (SouFun Holdings Ltd)
    • $10.01 USD
    • -0.24
    • -2.4%
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