Please ensure Javascript is enabled for purposes of website accessibility and Jumei Make China Dot-Coms Cool Again

By Rick Munarriz – Jun 2, 2014 at 11:41AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More and Jumei moved nicely higher last week.

Last week was a good one for fast-growing Internet companies, but it was a great one for China's recent IPOs. (JD 0.55%) and Jumei International Holding (JMEI) were two of last week's biggest winners, soaring 24% and 21%, respectively.

Jumei, China's largest online retailer of beauty products, went public at $22 on May 16. Less than a week later it was, the country's largest consumer-direct retailer, making its Wall Street debut at $19. 

Neither stock had gained a lot of traction before soaring this past week, even if they were only being flipped in the exchanges a few days earlier. Jumei shares had closed at $22.80 a week earlier, and went into the Memorial Day holiday weekend at $20.20. got a boost when coverage was initiated by CLSA with a buy rating. However, it closed out the week above its price target of $24.50. also was helped out by a report indicating that WeChat, China's popular mobile messaging app, updated its application with a shopping portal powered through

There wasn't necessarily any Jumei-specific news last week. It just moved higher in sympathy with and Chinese growth stocks in general. There's also some serious buzz that's building for Alibaba that will likely lift all of the major e-commerce players. and Jumei are growing quickly, though profitability has been elusive for It commands nearly half of China's B2C, or business to consumer, market. A whopping $20.7 billion in gross merchandise volume was sold through the site last year. has 47.4 million active customer accounts. Revenue soared 68% to $11.5 billion. Its net operating deficit narrowed last year, but that may not be enough for investors used to seeing e-tailers cranking out that kind of sales volume to be highly profitable. 

Jumei is another interesting speedster. Net revenue more than doubled to $483 million last year, and it's been profitable since 2012. There are 10.5 million customers relying on Jumei for discounted beauty product with an impressive repeat purchase rate of 89%. 

Both stocks are established and successful, but they may be mere appetizers ahead of the upcoming Alibaba IPO. However, that's the kind of growth that will likely result in the underwriters that took them public to push out bullish reports on and Jumei when the quiet periods end for both stocks. and Jumei may not exactly be household names for stateside investors, but after last week's big gains it won't be a surprise to see them become market darlings in a hurry.

Rick Munarriz has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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