China's housing market is red hot again. E-House China Holdings Limited (EJ), one of China's largest real estate agencies, has beaten the Zacks Consensus Estimate by wide margins the last 3 quarters. This Zacks Rank #1 (Strong Buy) is expected to see triple digit growth in 2013 and 2014.

E-House provides real estate services in about 250 cities in China including online advertising and e-commerce, acting as a primary sales agency, secondary brokerage services, information and consulting services and real estate management.

300% Earnings Beat in Q2

On Aug 16, E-House reported its second quarter results and blew by the Zacks Consensus Estimate by 300%. Analysts had expected a loss of $0.04 but E-House reported profit of $0.08.

Revenue jumped 43% to $163.4 million led by the real estate agency group and online services. Online services saw revenue soar 79% to $71.9 million. The real estate agency services group saw revenue rise 38% to $62.6 million.

Online services has been two years in the making. The upgraded 3.0 version of the e-commerce platform launched to customers on June 18. As of Aug 15 it had signed 986 e-commerce contracts with its developer clients. This platform is expected to be a big revenue driver in future quarters.

Raised Revenue Guidance

After a huge second quarter, E-House raised its full year revenue guidance to $630 million from its previous guidance of $600 million. That's a 36% increase from 2012 which had revenue of $462.4 million.

China's Housing Market is Red Hot

Since the financial crisis, as housing prices rose, the Chinese government became concerned enough about the possibility of a housing bubble that it tried to cool the housing market.

It instituted new mortgage down payment requirements. In some cities, it also restricted the number of properties a single person could own in order to cut down on speculative investment.

These new regulations did cool the housing market. But this year, as the Chinese economy slowed, the new leadership hasn't been as willing to slow the price increases.

Since the new leadership took control in March, it hasn't instituted any new housing regulations. In an economy where there is almost no other investment options, besides stocks, which aren't considered a good investment by a majority of the population, that leaves only housing.

For many Chinese, housing is still considered a 'sure thing.' In August, home prices in China's largest cities rose over 20% year over year, the largest increase in the last 3 years.

As long as the government doesn't move to tighten housing, companies like E-House should benefit.