Piper Jaffray Reiterates Underweight on CNinsure

Piper Jaffray reiterated its Underweight rating on CNinsure CISG. In a research report published today, Piper Jaffray lowered its earnings per share estimates for the next two years, in spite of the company's better than expected Q1 results. In the report, Piper Jaffray states, "CISG reported 1Q11 EPS of $0.25 compared to the PJC estimate of $0.19 and consensus estimate of $0.23. The beat was driven by significantly lower expenses ($34.4M actual vs. $44.5M estimate), which offset a revenue shortfall. There was a substantial amount of noise going into the quarter given the Datong divestiture and expected e-commerce platform investment. We modeled a more even rollout for the e-commerce spending in 2011, however it now appears the majority of this will come in 3Q and 4Q. The company did not address the $19.00 per share offer (from TPG and management-led investment group) on the conference call. We revised our estimates coming out of the quarter, lowering 2011 EPS from $0.95 to $0.93 and 2012 EPS from $0.85 to $0.78. We maintain our Underweight rating." Piper Jaffray has a $10 price target set on CNinsure. On Monday, CNinsure lost 1.85% to close the day at $15.89. Its shares regained all of yesterday's losses, however, rising 5.41% to $16.75.