E-House (China) Holdings Limited (ADR) (EJ) Earnings: An Early Look

Just last week, though, E-House (China) Holdings Limited (ADR) (NYSE:EJ) got bad news from the Chinese government, which took action to try to cool off the soaring housing market by raising minimums on down payments and requiring higher loan rates for second-home purchases. China also said it would enforce a 20% capital-gains tax on property sales. In response, E-House (China) Holdings Limited (ADR) (NYSE:EJ) and residential real-estate developer Xinyuan Real Estate Co., Ltd. (ADR) (NYSE:XIN) lost ground, although E-House (China) Holdings Limited (ADR) (NYSE:EJ) managed to claw back its lost ground by Friday’s close. SouFun Holdings Limited (ADR) (NYSE:SFUN) , which operates an Internet-based real-estate portal offering listing services and facilitating relationships with home furnishings and improvement companies, also dropped, even though it had announced strong results in its most recent quarter. All three companies stand to lose from a cooling market, although E-House’s transaction-based revenue arguably puts it in somewhat better position than companies that actually own real-estate-related assets.

In its report, watch for how E-House plans to respond to China’s recent move. If it can maintain high volume despite the new restrictions, then E-House should get stronger despite its recent bullish run.

The article E-House Earnings: An Early Look originally appeared on Fool.com and is written by Dan Caplinger.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter: @DanCaplinger. The Motley Fool has no position in any of the stocks mentioned.

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