Sector Snap: Most Chinese Internet stocks decline

Chinese Web stocks traded mostly lower Monday, with Ctrip.com International Ltd. declining after an analyst said a lack of available hotel rooms in Beijing during the August Olympics could hurt the online travel company.

Shanghai-based Ctrip's American Depositary Shares fell $2.10, or 3.6 percent, to $56.28 in afternoon trading. In the past year, the stock has traded between $35.91 and $70.89.

In a client note, Susquehanna Financial Group analyst Chunming Zhao said he thinks Ctrip "could experience some significant slowdown in the third quarter."

Zhao said his research indicates most of the rooms at more than 30 of the leading hotels in Beijing are reserved for the games by the Beijing Olympic organizing committee.

Also, room rates could be 4 to 10 times higher than normal during the games, which he expects will lead to Ctrip customers changing or canceling travel plans.

A Ctrip spokesperson could not immediately be reached for comment.

Elsewhere in the sector, shares of Shanghai-based Internet portal operator Sina Corp. fell 47 cents to $52.80.

The stock was added to Kaufman Brothers' June "Focus" list on Monday.

Kaufman analyst Jason Avilio said in a client note that he thinks Sina, the biggest portal in China, can keep its quarterly advertising growth rate above 30 percent "which should translate into equally strong earnings growth over the long term."

He rates Sina shares "Buy" with a $78 price target.

Shares of Hong Kong-based software, gaming and Internet service provider CDC Corp. declined 4 cents to $3.34.

Susquehanna analyst James Friedman increased his 2008 revenue estimate to $389.7 million from $384.6 million and narrowed his loss estimate to a penny per share from 5 cents per share.

The analyst reiterated his "Positive" rating and $5 price target for the stock, saying the company's first-quarter report "showed signs of improvement" and some of the company's units "continue to demonstrate a better tone of business."

ADS of Beijing-based online gaming company Perfect World Co. fell $1.38, or 5.1 percent, to $25.59, while ADS of Shanghai-based competitor Giant Interactive fell $1.02, or 6.9 percent, to $13.67.