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Buy-Rated CHINA Well Positioned
CDC Corp's (CHINA - Snapshot Report) revenue for the third quarter of 2007 increased 27% year-over-year. However, its adjusted EPS missed market expectations by four cents due to lower revenues from its online gaming business and its wireless business.
We still think CDC is well-positioned to leverage the growth opportunities in small-to-medium business enterprise software market and China's online game market. In addition, its stock is trading at a lower valuation than its peers. Overall, we don't think its current stock price fully reflects the company's intrinsic value. Therefore, we are maintaining our Buy rating on CDC shares.
Based on our estimate for fiscal year 2008 earnings per ADS, the stock is trading at 12.8x, which is also much lower than the industry mean. Using a P/E multiple of 18.0x our fiscal year 2008 earnings per ADS estimate of $0.28 yields a target price of $5.00, which can reflect company's great growth prospects, in our view.
Read the full analyst report on CHINA.
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| Market Summary | Jul 31, 2010 13:30 pm ET |
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