Zacks is out with an article today on CDC Corporation (CHINA) where they appear bullish on the stock. They give the stock a target price of $3.50. They site growth in the Chinese gaming market as the primary factor that will drive earnings for the company:
"It is expected that China's online game market will grow 49% in 2008 over 2007. We forecast China's online gaming market would grow to RMB 40.1 billion yuan by 2011. "
I did some digging and found another article at Zacks from August 18, that contains the same language (literally the same sentences) as the article that was published today, however no price target was given at the time.
How about other sources? According to this article, Cantor initiated CHINA with a buy in February and gave it a $6 price target.
How about the Motley Fool? This article covered the stock when it was trading at $4 a share calling the stock at that time fairly valued. Another Fool article called shares "a compelling value" when shares were trading at $4.02 in January.
It appears that the stock is down mainly due to the attitude of investing in Chineese stocks. The Chineese gaming market is poised for growth, and CDC should get its share of that growth. However, management must do all that it can in order to control costs and drive profitability.
This could be an intriguing long term play, but it may be a bumpy ride for the next twelve months.