It was a good week for investors in many of China's publicly traded growth companies. Several of the country's growth darlings came through with double-digit percentage gains as investors flocked back into Chinese equities. Let's check out some of the shining stars that came through with big moves last week.
|Company||June 13||Weekly Gain|
|Youku Tudou (NYSE: YOKU)||$21.38||12%|
|Home Inns & Hotels (NASDAQ: HMIN)||$33.78||10%|
Let's start with 58.com. The exchange-traded rookie has only been on the market since last October, but it's been on a tear. The leading online marketplace provider has seen its stock nearly triple from its $17 IPO price. The company that some call the Craigslist of China saw revenue more than double in its latest quarter. It has posted profits in its first two quarters as a public company. There hasn't been any company-specific news to propel the shares higher beyond last month's blowout quarterly report, but the stock has still managed to move higher in seven of the past eight trading days.
E-Commerce China Dangdang is an online retailer that got its start selling books before moving on to sell more general merchandise. Unlike 58.com, which helps sellers match up with buyers, Dangdang sells its own wares to consumers. Revenue inched just 30% higher in its latest quarter, and it's now closing in on profitability.
There wasn't any company-specific news out for Dangdang, either, but one possible catalyst for the double-digit upticks was Barclays initiating coverage of Vipshop (NYSE:VIPS) with a buy rating last week. Vipshop has been the rock star among China's publicly traded online platforms, using the Groupon-like flash-sale model to sell brand-name apparel. Growth and profitability have been stellar, and Barclays is going with a price target of $228 for Vipshop.
Youku Tudou is the combination of Youku and Tudou, two of China's most popular video streaming websites that merged two summers ago. Beyond HSBC upgrading Youku Tudou late last month, there hasn't been a lot of bullish updates out of the company. This morning it did announce a bigger push into original content -- a total of 20 self-produced reality shows, talk shows, and drama series that will hit its site later this year -- but naturally that wouldn't have played a part in last week's move higher.
Home Inns is the one company on this list that isn't a website operator. True to its name, it operates 2,241 hotels across the Home Inn, Motel 168, and Yitel brands across China. Top-line growth has slowed as it has matured. Revenue rose a mere 5% in its most recent quarter. Its occupancy rate has slipped from 83.6% a year earlier to 81.3% now. It was upgraded by Macquarie late last month, but it too didn't have any material developments to back its spike this past week.
Then again, the lack of material news driving all four stocks to double-digit percentage gains is also news in itself. Investors are growing comfortable with buying back into China's consumer-facing companies. The volatility will continue, but at least the four stocks won the latest round of trading.