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The state of China’s wobbly economy will come into focus next week when a pair of big Chinese Internet companies are set to report fourth-quarter earnings. First up to bat is NetEase ( NTES ), a home-field favorite on China’s gaming scene. It ranks a close second in gaming to Tencent Holdings ( TCEHY ), which reports earnings next month. Also coming next week is China search engine leader Baidu ( BIDU ), followed by e-commerce company JD.com ( JD ) on March 1. NetEase is set to report after the close Wednesday. The company topped earnings expectations when it post Q3 earnings Nov. 11, sending its stock to a then record high of 159.34, as revenue rose 114% in local currency, year over year. The stock continued upward and hit an all-time high of 186.45 on Dec. 29. NetEase has pulled back and closed Thursday near 152. The Q4 consensus estimate on NetEase is for sales to rise 121% in local currency to $1.17 billion. Earnings per share minus items are seen rising 52% in local currency, to $2.25. Analysts will look at the state of new mobile games in the pipeline. In late December, NetEase unveiled 26 new mobile and PC games. Baidu is set to report after the close Thursday, with analysts looking for guidance on China’s ad market amid an economic slowdown. Baidu stock jumped 11% to 197.47 when it reported Q3 earnings on Oct. 30 that were in line with estimates. Revenue rose 36% in local currency. Analysts expect Q4 revenue will rise 32% in local currency, to $2.85 billion. EPS minus items is seen falling 27%, to $1.01. Last week, Baidu announced that it had received a non-binding proposal from two Baidu executives to acquire the company’s fast-growing Qiyi video wing for $2.8 billion. Baidu stock hit a seven-month high of 217.97 on Nov. 30 but closed Thursday near 161. JD.com is slated to report Q4 earnings before the market open on March 1. The focus is expected to be on JD’s push into online-to-offline (O2O) retailing and other new businesses. JD is banking on its O2O business to help it compete in China’s burgeoning e-commerce arena vs. China e-commerce leader Alibaba ( BABA ) and others. Analysts expect sales to rise 50% in local currency to $7.96 billion. They see the company swinging to a two-cent per-share loss from a penny profit in the year-earlier period. Tencent, China’s leader in messaging and gaming, is set to report earnings before the market open March 17. It’s traded in the U.S. over the counter. Tencent, Alibaba, JD and Baidu are the four largest Internet companies in China. On Jan. 28, Alibaba reported earnings for its fiscal third quarter, ended Dec. 31, that topped Wall Street expectations. Scalper1 News
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