SouFun Holdings Ltd (NYSE:SFUN) has been highly reliant on the happenings of the Chinese market and with the recent financial slowdown in the country, SouFun is advancing on speculation of a possible stimulus. The stock has also attracted interest from billionaire Daniel S. Och, whose investment company recently bought 4.61 million additional SFUN shares. The transaction has also made his company the owner of 5.09% stake in SFUN.
Recently, China has been experiencing a change of pace in its market. As the Exports for the year declined by 5.5% for the country, while there was a decline of 13.8% in the imports as well. The last time a similar situation was observed, the Chinese government had intervened in the markets with a stimulus and the analysts are hoping the trend would repeat itself.
SFUN had also released its earnings for the 2Q2015 and reported revenues of $210.43 million and net income of $16.13 million. However, the company’s gross profit margins suffered a setback of over 30%, as compared to the same period last year. As per the analysis performed by Street Ratings, the revenue growth of the company has been significantly higher than the industry average. Unfortunately, the company’s debt-to-equity ratio of 0.8 was also higher than the industry average. This hints at improved performance, but at the cost of severe liquidity.
Furthermore, the company has also been experiencing a decline in earnings per share; this can be due to a high level of liquidity or the narrowing of operating margins. Nonetheless, SFUN is expected to experience a loss of 75.7% to its EPS in the coming year. A deeper analysis of the 2Q2015 report suggests that the company is holding on to its market share, but still suffering significant losses in terms of earnings and revenues.
SouFun Holdings Ltd (NYSE:SFUN) completed the September 16 session, with a spike of 5.42% in the share value. The stock saw trade volumes of 5.41 million to close at a share price of $5.84.
