High Costs at Youku and Sohu Pave Way for Explosive Growth

  Chinese internet firms have shown explosive growth in recent quarters. While revenues throughout the sector have skyrocketed, higher costs have crimped margins for many Chinese Tech heavyweights. The hope is that rising expenses will pay off in the future, in a similar manner to American rival Google. The Paragon Report examines the outlook for companies in China's Internet Sector and provides stock research on Youku.com, Inc. (NYSE: YOKU) and Sohu.com, Inc. (NASDAQ: SOHU). Access to the full company reports can be found at:

www.paragonreport.com/YOKU www.paragonreport.com/SOHU

Chinese internet stocks were being crushed over the summer as more government regulations were being considered. As The Wall Street Journal reported, "China's government is considering new regulations to govern a corporate structure that has enabled a wave of Chinese firms to list overseas by circumventing rules against foreign investment in sectors like the Internet."

Moreover, Michael Schuman of Time.com reports that several searches are impossible, emails are monitored, many web pages simply won't open, and others open so slowly that only an extremely patient or determined will endure the wait.

The Paragon Report provides investors with an excellent first step in their due diligence by providing daily trading ideas, and consolidating the public information available on them. For more investment research on China's Internet Sector register with us free at www.paragonreport.com and get exclusive access to our numerous stock reports and industry newsletters.

Despite all the hypothetical headwinds, Chinese internet firms continue to post amazing revenue growth. Sohu posted 17 percent year-on-year revenue growth in the third quarter. Profit was $45 million, or $1.17 per share, in the three months ending Sept. 30, Sohu announced. Like many of its industry peers, the company reported higher costs -- in Sohu's case related to game launches and video offerings.

Youku.com, China's leading internet television company, will report its third quarter 2011 financial results tomorrow after the close of the US markets. Last week Youku launched its new "Youku Presents" initiative to promote young filmmakers with the premiere of "Operation Thanksgiving."

The Paragon Report has not been compensated by any of the above-mentioned publicly traded companies. Paragon Report is compensated by other third party organizations for advertising services. We act as an independent research portal and are aware that all investment entails inherent risks. Please view the full disclaimer at http://www.paragonreport.com/disclaimer

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