The Orchid Pavilion episode has suffered a performance Waterloo

Absrtact: Two months on the market, the concept of the Electric Quotient Pavilion (NYSE:LITB) was hit by investors. Net revenue for the second quarter of fiscal year 2013 was 72.2 million U.S. dollars, below Wall Street's 75.8 million dollar forecast, according to its first earnings report after its IPO yesterday.

Listed two months, by investors, the concept of the electric quotient pavilion set potential (NYSE:LITB) suffered a performance Waterloo.

Net revenue for the second quarter of the 2013 fiscal year was $72.2 million, lower than Wall Street's 75.8 million-dollar forecast, with a year-on-year growth rate of 52.6% per cent and a year-on-year growth rate of close to 100% in the first quarter, with a net profit of 600,000 dollars and a net loss of $1.4 million in the same period last year, according

Among them, the second quarter of the Orchid Pavilion collection potential from the major market income growth has declined. Revenues from the European market rose by 105%, compared with 151% in the first quarter, and 16% in North America, compared with 40% in the first quarter.

The pavilion is expected to have a net revenue of only 68 million to 70 million dollars in the third quarter, far below market expectations. The second quarter of the listing not only growth but also the forecast performance of the chain fell, so investors surprised.

News, the Orchid Pavilion set potential stock price immediately tumbled 35%, the highest decline of more than 40%, as of the time of the Blue Pavilion set potential reported 12.59 U.S. dollars, a decrease of 34.56%.

Great performance

The Orchid Pavilion, which landed in the NYSE in JUNE this year, has been considered an ice-breaking trip to China's concept stocks, which had not been successfully listed in the US for 6 months.

Orchid Pavilion before the trend, the recent IPO or the November 2012 reunion YY, it ended since March 2012 only goods will be listed after 8 consecutive months to the United States listing empty window. But although YY listed good performance, but failed to open a new round of Chinese companies to the U.S. listing peak.

Apart from the Orchid Pavilion, 2012 to date only 5 Chinese Internet companies (gathering time, global market, the network, only goods will, 365 nets, did not calculate the champion tour of the unlisted) in the global capital market to achieve IPOs, of which, only the era, only 2 companies in the U.S. stock market.

After the IPO, the pavilion set from the 9.5 dollar price, all the way up to August 14 the highest value of 22.21 U.S. dollars, two months, the price rose 133%, many domestic listed companies due to the successful listing of Orchid Pavilion is encouraged.

In the IPO roadshow, the Orchid Pavilion set potential CEO Guo disease has been emphasizing its 2010-2012 net revenue composite growth rate of 85%, and 2013 Q1 year-on-year growth is up to 99%. At that time Guo went to the company 2013 overall revenue growth is expected to be 64%.

"Why is it that the growth rate in the second quarter fell to 52.6% after the IPO and the third quarter growth rate was only 33-37%?" Barron's analyst Shuli Ren wrote in question.

Re-questioning the integrity of China stock

The explanation of the Orchid Pavilion's potential is very far-fetched, Guo went to the disease in the conference call, said that the two quarter of two things affect the company's earnings, first, the internal implementation of the problem, the company's commodity strategy too much focus on high-end products, low attention to low-end products, not expected to June the conversion rate significantly reduced.

"The second is that competitors have never reacted strongly to IPOs, and they have slashed the orchid pavilion by slashing prices and scrambling for traffic." "he said.

The U.S. investment bank, which has been paying close attention to the Pacific Crest, has been disappointed by the explanation of Guo's illness, and its conclusion in the paper is "send off the Orchid Pavilion set". "Unless they can release strong earnings in the next few quarters and rebuild investor confidence, we will not look at him again." ”

T.h.capital analyst Hou Tian also not optimistic about the development of Orchid Pavilion. "Rising prices in China and the appreciation of the renminbi will have a serious impact on the foreign trade companies such as the Orchid Pavilion, which will greatly weaken the competitiveness of Lan Ting." In addition, compared to the Amazon and other electric dealers, orchid Pavilion set potential for foreign users do not have any brand awareness. ”

Shuli Ren, who wrote in Barron's online edition, said that Chinese technology stocks had just had a hot summer, with an average return of 24.4% in the summer and a 6.6% per cent Nasdaq. "And the pavilion has once again prompted the lack of a good reputation in Chinese companies, remember the muddy water short Chinese stocks?" ”