What happened

Luokung Technology (LKCO -1.96%) shareholders enjoyed strong returns as the stock jumped in early trading on Thursday. Shares had spiked more than 11% but settled down to a 9% increase by 10:45 EDT, according to data provided by S&P Global Market Intelligence.

The rally was powered by a strong preliminary earnings report that the company  had issued earlier in the day.

A delivery driver uses a tablet to navigate to the next destination.

Image source: Getty Images.

So what

The Chinese small cap, which sells digital navigation and electronic map services, reported $38 million of sales for the first half of 2021, marking an increase of over 400% from the prior year. Much of that increase was driven by pandemic-related declines a year earlier, but Luokung also gained market share in a few attractive industry niches. Management cited autonomous driving and smart highways as examples. "We are very pleased with our market growth in 2021," CEO Xuesong Song said in a press release.

Now what

The company intends to post its full earnings results within the next two months. That update will include far more detail about the tech stock's earnings potential and its outlook for the rest of the year.

In the meantime, investors can expect continued volatility in the share price given Luokung's tiny market capitalization and Wall Street's skittishness about Chinese listings. The good news is that the company's operating trends are heading in the right direction, which means it should improve on its tiny annual sales footprint.