Thunder is no longer silent or short-term buying opportunities

According to an article by Don Dion, a US equities analyst, today, Thunder's long-term outlook may be constrained by its limited product portfolio, but because its underwriters may post a positive report after the quiet period ends, So will create short-term buying opportunities for the stock.

The following is the main content of the article:

Summary

- July 18 is the last day of the 25-day quiet period set by the Securities and Exchange Commission (SEC) for Thunder underwriters who will be able to release research reports for the company afterwards. July 19 will be the first day these Thunder publications they publish.

- These reports may be more positive attitude, promoting the stock price of Thunder before the end of the quiet period and the short rise in the next few days.

- Although Thunder did not achieve consistent strong performance, but its outstanding IPO performance, indicating that investors are very confident of Chinese technology companies, enthusiasm for such stocks.

- JPMorgan and Citigroup, both as thunder underwriters, have a reputation for helping Thunder boost stock prices.

text

After the quiet period, Thunder IPO underwriters will release the company's research report from July 19, which at least can boost the stock price of the Xunlei in the short term at least.

Thunder early market performance

Thunder IPO pricing beyond the first 9 to 11 US dollars range, to 12 US dollars per share listing, and achieved impressive performance on the first day of listing, to bring investors a 24.2% return. The stock has been declining since it closed at $ 15.26 on June 25. However, Thunder July 3 closing price of 14.55 US dollars.

Why quiet period ended buying opportunities?

Thunder IPO underwriters, including Citigroup, JPMorgan Chase and Oppenheimer, will post positive research reports after the quiet period in an attempt to regain the strong performance of the IPO.

The Journal of Finance once said that stock usually goes up a few days before the end of the quiet period as experienced investors buy relevant stocks at that time in the hope of benefiting from the active research published by the underwriters Newspaper

The lead author, Dan Bradley of the University of South Florida, and his colleagues explained that about 76% of companies would be included in the study immediately after the quiet period ended, often giving " Buy "or" Buy Strong "ratings. The corresponding stock will give investors a 4.1% return two days after and two days after the initial rating.

Bradley's article has also been confirmed by other researchers. A 2001 paper states that the average rating given by analysts at the end of the quiet period is "Buy" and the high ratings are positively correlated with high returns.

Early stock buying gave the impression of a demand increase, raising the stock price up to the end of the quiet period and possibly offering a short-term buying opportunity.

Bradley et al. Also pointed out that the reputation and quality of IPO underwriters were positively correlated with the stock price rise before and after the quiet period ended. From this point of view, Thunder underwriters will be on July 19 have an impact on the stock.

Our data from the past three years is consistent with the conclusions of these scholarly works.

Thunder business overview

Thunder is a cloud computing platform operator in China whose business is to accelerate users' access to digital content such as video, games and music.

Thunder is one of the top 10 Internet companies with the largest number of users in China. In the first three months of 2014 alone, the number of independent user visits was nearly 300 million. According to the market share calculation in March 2014, Thunder is also the No. 1 enterprise in China's network acceleration market.

Thunder hopes to make full use of China's backward Internet infrastructure and slower speed through its two core services and products. Thunder Accelerator is the company's most popular product, in March 2014 there are about 142 million active users. Thunder accelerator can be downloaded for free, to help users speed up the network data transfer speed. Thunder cloud accelerated subscription service can be used in a variety of products such as green channel and cloud broadcasting, to provide users with the so-called "high-speed and reliable quality service."

As of March 31, 2014, the company has 5.2 million subscribers of its cloud acceleration service and Thunder also offers online streaming video services, online gaming services and paid viewing services.

China's future market competitors

Thunder acceleration services are currently facing very little competition in China, but the Chinese Internet companies may enter this area in the future, its potential competitors include large companies such as Tencent and Baidu. Thunder video service but also with Youku, Tudou and love Fantastic Art competition.

Steady management

Thunder management by the company co-founder Zou Shenglong and Cheng Hao leadership.

Since its establishment in 2005, Zou Shenglong has served as chairman and CEO of the company, he is an expert in the field of distributed computing. Zou Shenglong holds a bachelor's degree in computer science from the University of Wisconsin-Madison and a master's degree in computer science from Duke University.

Cheng Hao has served as a director since the founding of the company and currently serves as CEO of Thunder Game Development (Shenzhen) Co., Ltd. He was previously responsible for Baidu search team's product, service, marketing and sales management. Cheng Hao holds a bachelor's degree in mathematics from Nankai University and a master's degree in computer science from Duke University.

Summary: short-term buying opportunities

Our long-term assessment of Thunder is "Neutral," but we think it will be a potential short-term buying opportunity before and after the quiet period ends.

The success of the company's IPO and its initial price rise reflected the enthusiasm of the US stock market in 2014 for the IPO of China's technology stocks.

However, we are concerned that the limited long-term prospects of Thunder may be affected by the limited available products. As China's Internet infrastructure improves, the demand for Thunder products may decline.

For investors who are interested in buying Thunder shares, the coming quieter period may push up the share price. (Long song)