Billionaire Daniel Och Boosts Stake In China’s SouFun Holdings Ltd. (SFUN)

Even though the shares of SouFun are down year-to-date, they closed 6.45% in the green yesterday, after China relaxed rules on property sales to foreigners in an attempt to boost demand amid a slowing economy. The rules preventing foreigners living in China for less than one year to invest in property have now been removed. Furthermore, the limits on the number of properties foreigners can acquire will also be loosened. The aforementioned restrictions on property sales were introduced back in 2006, when the Chinese government attempted to hinder speculation in the real estate market and cool down the overheating market. Some analysts believe that the freshly-announced policy relaxation will inject some growth into property stocks, as real estate prices are expected to get a boost. Nevertheless, the policy changes might actually serve as a notice that the Chinese economy and the real estate sector in particular are in bad shape at the moment. Even so, SouFun Holdings is set to benefit from the changes and only time will show to what extent the company can exploit the newly-unlocked opportunities.

Just a little while ago, SouFun Holdings Ltd. (NYSE:SFUN) announced its second quarter financial results, posting total revenues of $210.9 million, which were up by 25.4% year-over-year. However, the company’s fully diluted earnings per ADS decreased by 73.3% year-over-year to $0.04. It is worth mentioning that the year-over-year revenue growth was mainly driven by the growth in the company’s e-commerce services. To be more detailed, the revenue from e-commerce services was $106.8 million in the second quarter, compared to $48.6 million for the same quarter a year ago.

The shares of SouFun Holdings might actually represent a great buying opportunity should China’s economy revitalize. The recent policy changes are believed to be capable of spurring massive growth in the company’s top-line and it seems that Daniel Och and his team at OZ Capital Management believe that to be the case based on their bullish addition to their holding of SouFun.

Disclosure: None