The Zacks Analyst Blog Highlights: Alibaba, China Mobile, Qihoo 360 Technology and JinkoSolar Holding

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Dec 19, 2014, 09:30 ET

CHICAGO, Dec. 19, 2014 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Alibaba (NYSE:BABA-Free Report), China Mobile Ltd. (NYSE:CHL-Free Report), Qihoo 360 Technology Co. (NYSE:QIHU-Free Report) and JinkoSolar Holding Co., Ltd. (NYSE:JKS-Free Report).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Thursday's Analyst Blog:

China Stock Review and Outlook

The Shanghai Composite Index gained 0.5% on Monday, negating losses of around 1.6% at the close. Gains were led by construction and railway stocks. Analysts were of the view that a bullish sentiment about Chinese stocks continued to prevail. Construction and railway related stocks had emerged as the top performers because investors believe that more targeted economic measures were in the offing, they opined.

The CSI 300 added 0.8% while the Hang Seng declined 1%. The Hang Seng China Enterprises Index lost 0.2% following a slump in industrial stocks. In contrast, a gauge of industrial stocks within the CSI 300 gained 2.7%, the highest among the ten industry groups. Small-cap stocks also registered gains with the ChiNext increasing 2.1%.

The benchmark index moved past the 3,000 mark on Tuesday. Weak manufacturing data sparked speculation that the government will ease monetary conditions further to boost the economy. The HSBC/Markit China Flash PMI declined to 49.5 from the final figure of 50 in November. A level below 50 signifies contraction and this was the first such reading in seven months.

The Shanghai Composite Index gained 2.3% to close at its highest point since Apr 2011. In contrast, the Hang Seng China Enterprises Index lost 0.7%. The Hang Seng also declined, by 1.6%. However the CSI 300 added 2.7%. A sub-index of financial stocks advanced 6.3%, the highest among the 10 industry groups. Eight of the top 10 gainers were brokerage stocks.

The Shanghai Composite Index jumped to its highest point in four years on Wednesday, gaining 1.3%. Speculation that the government will ease monetary conditions and reduce capital requirements, which will enable brokerages to increase margin lending, was responsible for the day's gains. Analysts were of the view that brokerage stocks had good fundamentals and would emerge as the largest beneficiaries of the bull market.

The CSI 300 increased 1.7%. The Hang Seng lost 0.4%, following a slump in casino stocks. However, the Hang Seng China Enterprises Index advanced 1.2%. A gauge of financial stocks within the CSI 300 increased 5.3%, the highest among the 10 industry groups.

According to media reports, the country's market regulator was looking for an opportunity to introduce new regulations regarding the management of risk control indicators for brokerages. Revised rules would allow brokerages to reduce the limit on the net capital to net asset ratio.

Stocks slipped today and the Shanghai Composite Index lost 0.1%. These losses were a result of a surge in money market rates which increased because of the beginning of the year's largest new share sales. A slump in shares of electric car manufacturer BYD Co. also contributed to the day's losses. The company is backed by Warren Buffett's Berkshire Hathaway Inc.

Analysts believe investors will possibly allocate around 3 trillion yuan ($483 billion) towards orders for 12 IPOs to be introduced from today til Dec 25. They opined that even though this has resulted in higher pressure on liquidity, a correction was unlikely in the near future.

The CSI 300 declined 0.4%. In contrast, the Fed's statement on the timing of an interest rate hike resulted in gains for shares in Hong Kong. The Hang Seng advanced 1.1% while the Hang Seng China Enterprises Index added 0.5%.

Stocks in the News

Baidu Inc. (BIDU)confirmed on Wednesday that the Chinese search engine giant had acquired a stake in car-hailing app Uber Technologies Inc.

At a joint press conference held in Beijing on Wednesday Baidu's founder Robin Li said, "The car hailing industry is still in the early stage of development. It's a huge market and has a lot of potential."

The announcement follows media speculations that Baidu was looking to make an investment of up to $600 million. Uber is expected to get cash and non-cash assets including Baidu's online resources as owner of China's biggest Internet search engine. This is nearly 50% of the $1.2 billion raised earlier this month through a new round of funding.

Baidu's investment in Uber will enable it to further strengthen its offerings in the space against China's biggest e-commerce operators, Alibaba (NYSE:BABA-Free Report) and Tencent Holdings.

China Unicom (Hong Kong) Ltd. and China Telecom Corp. Ltd. will expand their hybrid LTE network trials to 15 more cities. The country's ministry of industry and information technology approved requests from the two companies to expand trials to more cities. China Telecom and China Unicom have been awarded licenses to operate FF-LTE services across 56 markets.

This move will help the two companies compete more effectively with the leader in the 4G segment, China Mobile Ltd. (NYSE:CHL-Free Report). The world's largest telecom operator already offers commercial TDD-LTE services in the country. Last month, China Mobile said that it has 50 million 4G connections.

The company already has 570,000 4G base stations. These are expected to increase to 700,000 by end-2014. In comparison, China Unicom had 2.7 million 4G connections at the end of September. China Telecom had 1.3 million 4G connections at the same point.

Qihoo 360 Technology Co. (NYSE:QIHU-Free Report) announced that it will form a joint venture with Coolpad Group Ltd. to manufacture mobile devices for the local market.

Qihoo will shell out $409.05 million and acquire a 45% stake in the new entity. The new entity will focus on building handsets that will mostly be distributed online.

Qihoo will be the provider of key mobile services for Coolpad's smartphones. Per the agreement, this will include security, app store and search.

The smartphones will be marketed under Coolpad's existing brand, Dazen. Recently, Chinese pop star Han Geng uploaded a photo of a Coolpad Dazen X7 smartphone on his official Weibo account. The most startling thing about the smartphone was that it seemed to be made out of glass entirely. According to reports, this handset will be rolled out in 2015 with a price tag of around $807.

The JV will bring together Qihoo's strong competence in mobile app development, online marketing and Coolpad's extensive knowhow in smartphone design, production, supply chain management and after-market services.

JinkoSolar Holding Co., Ltd. (NYSE:JKS-Free Report) declared that it has supplied solar photovoltaic ("PV") modules with a capacity of 80 megawatts ("MW") to China General Nuclear Power Group. The PV modules will be used for a solar project in the Neihuang County of Henan Province.

The solar panels will be mounted on the rooftops of traditional agriculture greenhouses of the region and is expected to be connected to the grid by 2014-end.

Neihuang County is an agricultural region that witnesses continually rising demand for electricity. This agricultural solar project will not only occupy less space but also generate clean power from alternative sources of energy.

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