Shares of the Chinese real estate services provider Leju Holdings (LEJU -1.33%) had fallen nearly 7% as of 11 a.m. EDT today after the company reported earnings results from the second quarter.
The company reported a loss of nearly $50 million, compared to a $1.2 million profit for the second quarter of 2020, primarily due to bad-debt provision. Total revenue climbed to more than $301 million, up 8% year over year.
The increase in revenue was driven by a 13% year-over-year increase in the company's e-commerce business, while its online advertising service revenue decreased 6% year over year.
"In the first half of 2021, amid tightening regulations in China's real estate industry, the pressure on real estate developers' operations and sales continued to increase," Geoffrey He, Leju's CEO, said in a statement. "Against this challenging backdrop, Leju's overall business was able to maintain steady growth."
The quarter wasn't as bad as it looked, as almost the entire loss can be attributed to a loss from one real estate developer client.
But Chinese stocks that trade on American exchanges have been very risky of late, with regulation always a looming threat. Intervention from the Chinese government in the country's real estate market might even be more of a threat than in other industries, which is why I would evaluate this company with extreme caution.