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Domestic Websites Manage to Keep Going
Nasdaq broke through the psychological defense line of 2000 points on March 13, but Chinese companies listed on the Nasdaq market did not follow the general trend. China.com had a slight rise of 2.17% to close at US$2.94, Sina.com dropped by 8.87% to close at US$1.77 while both Sohu.com and Netease equaled the price of the day before to close at US$0.84 and US$1.56 respectively.
Don't Be Panic: Sina.com
Wang Zhidong, CEO of Sina.com, holds that global economic depression, especially the overall economic recession of the United States, has filled the air with panic among the investors. Not only the Nasdaq market, dubbed as representative of the New Economy, but also New York Stock Exchange and SP500 have witnessed an overall plunge.
"Inter-active panic and impatience exhibited by investors and financial analysts have, to some extent, fueled stock slump. In the market chaos resulted from stock plummet, the most important point from which analysts often deviate in their grasp of the fundamental plane of the company is that they make an inappropriate comparison between the American dotcoms and their Chinese counterparts without regard for the difference in the actual conditions of each company.
Wang admits that the market situation is hardly predictable. The bottom limit for the decline referred to by analysts is based on the calculation of probability and mathematical mode, political factors and change in the enterprise itself would lead to radical fluctuation of stock prices.
"Unlike the basically mature dotcoms in North America, Chinese dotcoms have lots of market areas that remain to be opened up, so it is improper to compare Sina to Yahoo. Querying the Yahoo model has inflicted great impact on Yahoo's stock price, Sina.com, on its part, has developed and is developing a series of new products. It will take time and mood for the market to comprehend Chinese companies' real situations."
When commenting on the prevailing rumor that Sina.com were discussing with MSN matters concerning acquisition Wang explained that the current share price may cause great loss to investors who enter Sina com rather late, but Sina is strictly carrying out the commitments made to investors when it raised money. The current share price may be discouraging, but the company is really executing its plans steadily.
Still 'Enigma': Sohu
Among the four listed Chinese companies, the stock price of Sohu is the lowest, which has come down to US$1 and is on the verge of having its shop sign removed. Charles Zhang, CEO of Sohu says: "Technically, the company can avoid losing its status as listed company via various means like re-purchase, but can not reverse the situation, so in the long run, the best way is to make profits as soon as possible."
Mr. Zhang noted that investors and users of Sohu, a popular brand name, are not overlapped and the share purchasers know nothing about Sohu.
The difference between China and the US has resulted in the fact that US investors' impression of Chinese companies is based on inadequate and inaccurate information. In the meanwhile, the Chinese exaggerate changes in the US stock market. The important thing is to reach a consensus between the market and the company.
China.com, Netease Not in Easy Going
China.com, once the limelight of Chinese concept stocks at Nasdaq, has been trapped in bad lucks. The fiscal report, designed to be released in mid-February, was finally released on March 14 after repeated delays, claiming a net loss of US$59.8 million in 2000, or US$0.61 loss per share.
Netease, like Sina and Sohu, has spared no efforts to make money, however, the result cannot be decided by the company itself.
'Not the Time for Purchase'
Analysts from Credit Suisse First Boston said that the performance of China's portal websites is obviously linked to the crisis facing Yahoo, and investors have doubt about this business mode.
For China's portal websites, online ads are probably the main source of income, as are those for Yahoo, while the fourth-quarter fiscal reports have disappointed people and the expectation on the first quarter income has been toned down.
Merrill Lynch Securities has even adjusted the estimation on China's online ads market from the original US$120 million to US$80 million.
As for overseas magnates hoping to enter into the Chinese market, China's portal websites, which are suffering from heavy trauma from the stock market, are undoubtedly alluring. However, analysts say that the purchasing ability of big companies also has been weakened by the stock price fall. "They will not purchase until the share prices of China's portals further plummet".
By PD Online staff member Ying Guoliang
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