China online discount retailer Vipshop Holdings (VIPS) turned in a stronger-than-expected quarterly earnings report late Monday, but shares erased morning gains.
Vipshop's results follows strong earnings reports from Alibaba (BABA) and JD.com (JD), with those of NetEase (NTES) and Tencent Holdings (TCEHY) coming up.
Vipshop reported revenue of $2.02 billion, up 49% in local currency and beating the consensus of $1.9 billion. Vipshop attributed the gains to a 62% year-over-year increase in the number of active customers to 23 million and a 54% year-over-year increase in total orders to 68.9 million.
It reported earnings minus items per American Depositary Shares of 17 cents, beating the consensus of 10 cents and rising 30% year over year in local currency.
For Q3, Vipshop expects revenue of $1.8 billion to $1.9 billion, up 40% at the midpoint in local currency and above the consensus of $1.78 billion.
Vipshop stock rose as high as 17.41 intraday but closed up just 0.4% to 16.07 in the stock market today.
IBD'S TAKE: Vipshop is one of three Chinese internet stocks on the IBD 50 list of top-performing stocks. Vipshop stock is up 58% since it hit a 28-month low on May 23. It sports an IBD Composite Rating of 99, the highest possible.
China e-commerce giant Alibaba -- which, like Vipshop, is an IBD 50 company -- crushed fiscal Q1 earnings estimates last week, driving its stock up 7% that day to an 18-month high. Alibaba received a slew of upgrades and price target increases after the earnings report.
Alibaba stock, though, fell 0.5% Tuesday, a second straight modest retreat after a three-day, earnings fueled breakout..
Alibaba rival JD.com last week also reported better-than-expected June-quarter earnings, sending its shares rising, even though JD.com's Q3 guidance missed Wall Street estimates.
The other China company on the current IBD 50 is NetEase, which reports Q2 earnings after the close Wednesday. The China gaming company is expected to report revenue of $1.25 billion, up 83% in local currency, and EPS ex items of $2.64, up 63%.
NetEase develops and operates some of China's most popular PC and mobile games and also provides advertising services, e-mail services and e-commerce platforms.
NetEase stock rose 0.8% to 213.20, hitting a record high for a second straight day.
Also due to report earnings Wednesday is Tencent Holdings (TCEHY), China's leader in messaging and gaming. The consensus estimate is for Tencent is revenue of $4.97 billion, up 41% year over year in local currency terms, and earnings per share minus items of 17 cents, up 45%.
Tencent stock, traded over the counter in the U.S., was up 1.7% to 25.10 Tuesday, touching an all-time high for the third straight session.
