UPDATE: Oppenheimer Lowers PT on ChinaCache International Following Mixed 2Q Results

In a report published Wednesday, Oppenheimer analyst Andy Yeung reiterated an Outperform rating on ChinaCache International Holdings Ltd. CCIH, but lowered the price target from $10.50 to $8.50. In the report, Oppenheimer noted, “CCIH again reported mixed 2Q results with better than expected revenue but lower than expected earnings. Revenue grew 35% y/y, led by Enterprise and Internet & Software verticals. GM improved modestly q/q and was flattish y/y. However, opex as a % of revenue remained elevated due mainly to higher personnel costs. CCIH suggested that with better bandwidth utilization, cost controls and economies of scale margins should improve gradually in coming quarters. CCIH guided to 3Q sales of $44.3-45.1M, above our and consensus estimates of $41.9M. While revenue growth was encouraging, the lack of operating leverage will likely continue to test investor patience. We're lowering our PT from $10.50 to $8.50 on lower earnings estimates.” ChinaCache International Holdings Ltd. closed on Tuesday at $5.48.