Written by Rebecca Lipman

The highly anticipated Facebook IPO is highlighting the value of social media on a global scale. But no country is feeling the effect as strongly as China, whose social media companies like Sina Corp, Tencent Holdings Ltd. and RenRen Inc. have experienced a nice boost in value since headlines of the IPO circulated.

MarketWatch reports that the IPO "indirectly draws attention to the potential of China and its 500 million Internet users," and the regulations that block the company from entering. Facebook has said they are continuing to explore the possibility, and restrictions, of entering the Chinese market.

"We do not know if we will be able to find an approach to managing content and information that will be acceptable to us and to the Chinese government," Facebook said.

But more importantly, would Facebook succeed in China? China's approach to social media, which has already proved successful, is much different than Facebook. In China, micro blogs are more popular than the social platforms Google offers.

"J.P. Morgan analysts said that cultural preferences in mainland China place more emphasis on content than connectivity to other users," reports MarketWatch. "They said that in 2011, traditional social networks in China were overtaken by micro blogs in terms of subscriber growth and user activity.

This is not to mention that the China's social media market is already well satisfied with homemade media products. Facebook, if allowed in the country, may face difficulties in gaining a foothold.

Interactive Chart: Press Play to compare changes in market cap over the last two years for the stocks mentioned below.







Business Section: Investing Ideas
Facebook is highlighting the value of social media products and challenging the valuations of tech companies. And if Facebook has no proper place in China, maybe China should be reconsidering the value of their own services.

It seems that investors have the same idea.

With that in mind we decided to create a screen on Chinese tech stocks for those that are experiencing significant levels of institutional buying.

Hedge funds seem to think these companies should be worth more. Do you agree? (Click here to access free, interactive tools to analyze these ideas.)

1. Sina Corp. (Nasdaq: SINA): Provides online media and mobile value-added services (MVAS) in the People's Republic of China. Net institutional purchases in the current quarter at 2.1M shares, which represents about 3.19% of the company's float of 65.77M shares.

2. Sohu.com Inc. (Nasdaq: SOHU): Engages in the brand advertising, online gaming, sponsored search, and wireless businesses in China. Net institutional purchases in the current quarter at 1.6M shares, which represents about 5.37% of the company's float of 29.82M shares.

3. Isoftstone Holdings Limited (NYSE: ISS): Provides various information technology (IT) services and solutions in the Greater China and internationally. Net institutional purchases in the current quarter at 10.8M shares, which represents about 32.69% of the company's float of 33.04M shares.

4. AutoNavi Holdings Limited (Nasdaq: AMAP): Provides digital map content and navigation and location-based solutions in the People's Republic of China (PRC). Net institutional purchases in the current quarter at 1.2M shares, which represents about 5.01% of the company's float of 23.94M shares.

5. UTStarcom, Inc. (Nasdaq: UTSI): Designs and sells Internet protocol (IP)-based telecommunications infrastructure products to telecommunications service providers and operators worldwide. Net institutional purchases in the current quarter at 16.6M shares, which represents about 17.02% of the company's float of 97.54M shares.

6. Bitauto Holdings Limited (Nasdaq: BITA): Provides Internet content and marketing services for the automotive industry in the People's Republic of China. Net institutional purchases in the current quarter at 440.6K shares, which represents about 3.86% of the company's float of 11.42M shares.

7. Hanwha SolarOne, Ltd. (Nasdaq: HSOL): Provides various energy solutions including silicon ingots, wafers, monocrystalline and polycrystalline solar cells, and solar modules. Net institutional purchases in the current quarter at 1.4M shares, which represents about 6.28% of the company's float of 22.28M shares.

8. Tudou Holdings Limited ADR (Nasdaq: TUDO): Operates as an online video company in the People's Republic of China. Net institutional purchases in the current quarter at 1.7M shares, which represents about 12.13% of the company's float of 14.01M shares.

9. BCD Semiconductor Manufacturing Limited (Nasdaq: BCDS): Engages in the design, manufacture, and sale of power management analog integrated circuits (ICs) and other semiconductor devices in the People's Republic of China. Net institutional purchases in the current quarter at 1.2M shares, which represents about 8.88% of the company's float of 13.51M shares.

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Disclosure: Kapitall's Rebecca Lipman does not own any of the shares mentioned above.



Tickers in this Article: SINA, SOHU, ISS, AMAP, UTSI, BITA, HSOL, TUDO, BCDS

comments powered by Disqus

Trading Center