April 24, 2010 (Chinavestor) Chinese stocks went to a different direction then their U.S. counterparts. While the DJIA ended its eight week higher in row the Shanghai Composite Index (SHA:000001) fell the most this week in five months! Chinese regulators stepped on the breaks following a record 11.7% property price increase in March. Banks are banned from lending loans for third homes while regulations got tighter to get loans on the first place. New measures are in the drawing boards to tax third homes - in case the property market fails to cool down.
Investors started to shun real estate stocks but the sell-off became universal as the week dragged on. Investors fear that consumption might fall due to the curbing measures, hurting growth for consumer stocks.
The bright spot was earnings of a selected few. Chinese airliners reported a return to profitability - China Eastern Airlines (NYSE:CEA) and China Southern Airlines (NYSE:ZNH) were on fire for the week advancing 16.7% and 9.8%, respectively. Stocks with over 10% increase for the week included ReneSola Ltd. (NYSE:SOL), China Technology Development Group (NASDAQ:CTDC), China TransInfo Technology Corp (NASDAQ:CTFO), China Automotive Systems (NASDAQ:CTFO) and Global Sources Ltd. (NASDAQ:GSOL).
The earnings calendar was full of NYSE listed China plays. Besides airliners, Aluminum Corp. of China (NYSE:ACH), Huaneng Power (NYSE:HNP), New Oriental Education (NYSE:EDU), China Life Insurance (NYSE:LFC), China Mobile (NYSE:CHL), Guangshen Rail (NYSE:GSH), Yanzhou Coal (NYSE:YZC) and Semiconductor Manufacturing Int'l. (NYSE:SMI) reported either operational statistics or quarterly earnings.
Aluminum Corp. of China (NYSE:ACH) swung back to profit but its shares traded water for the rest of the week. Huaneng Power (NYSE:HNP) electricity generation jumped 40% in the first quarter - yet the markets took little not of that. Huaneng Power 2010 Q1 surprises to the upside.
New Oriental Education (NYSE:EDU) reported better-than-expected quarterly report, sending its shares sharply higher on Tuesday. But outlook is not that bright as our analysis suggests. New Oriental enjoys a ride after quarterly earnings.
China Life Insurance (NYSE:LFC) reported March operational statistics - creating little excitement. While the outlook for the industry remains robust, latest numbers came a bit as a disappointment. China Life Insurance March 2010 growth slows.
China Mobile (NYSE:CHL), the largest mobile carrier in the world by subscriber numbers, reported in-line first quarter earnings. Investors were disappointed for the most part, seeing no explosive growth. China Mobile cruising along in 2010 Q1.
But CHL's numbers were not as bad given the softness of the whole sector. China Unicom (NYSE:CHU) reported March operational statistics that filed to impress investors.
Chinese airliners created buzz - blowing past expectations. Both airliners returned to profitability on strong passenger numbers and outlook is bright as disposable income in China is on the rise. The World Expo in Shanghai is expected to boost earnings for China Eastern Airlines (NYSE:CESA), the airliner with a hub in Shanghai controlling over 50% of the skies in the city. Update: China Southern Airlines remains explosive.
For more about the travel industry in China, read : Overview: China online travel industry.
Looking forward: earnings remain in focus. Internet advertisement giant Sohu.com (NASDAQ:SOHU) will report 2010 Q1, giving investors an idea what to expect from Sina Corp. (NASDAQ:SINA), NetEase.com (NASDAQ:NTES) and Baidu.com (NASDAQ:BIDU). For more upcoming events, read China stock earnings calendar April 26-30.