CDC Corporation (CHINA)

[EZ2]

HNY !!!!

Zacks.com
CDC Corp. Remains a Buy
Monday December 31, 9:58 am ET
By Paul Cheung, CFA

A recent pullback in share price on Chinese Internet content provider CDC Corporation (NasdaqGM: CHINA - News) appears to provide a good entry point, according to Zacks senior Chinese market analyst Paul Cheung, CFA:

\'CDC\'s 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 2007 earnings per share, the stock is trading at 15.8x, which is much lower than the industry mean. Based on our estimate for fiscal year 2008 earnings per ADS, the stock is trading at 14.7x, 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.