Emerging Money China Internet Index (EMCI) is poised to bounce at 79 on the index leaving at the 20 day moving average support.
After 5 days moves in high flyers like VIPS (-15.6%), EJ(-9.1%), QIHU(-6.5%), and Sina (-4%) these stocks have taken froth off the top but with fundamental top line growth remaining solid across the sector we are looking for these names drive performance in the index.
BIDU’s trading range is between $150-$180 and trades at the SAME P/E multiple as GOOG (32X current P/E) yet offers growth in excess of 40% at recent quarter.
The Weibo and Alibaba IPOs are going to highlight where there is real growth and where scale will also win out in China as it does in tech U.S. BIDU is where you find the best mix of valuation growth, and stability. Your downside risks remain state related interference risks and proper capital allocation.
