Chinese growth stocks are back in favor.
Lightinthebox Holding Co Ltd-ADR (NYSE:LITB) became the first Chinese company to go public on a stateside exchange since last year on Thursday.
The online retailer of apparel, gadgets, and home furnishings priced its IPO at $9.50 on Wednesday night, closing out the week 32% higher.
The IPO itself is a pretty big deal. You have to go all the way back to November of last year to find the last time that a Chinese company was able to go public on a U.S. exchange.
Lightinthebox Holding Co Ltd-ADR (NYSE:LITB) has yet to turn an annual profit, but revenue did soar 72% to $200 million last year. LightInTheBox has some appeal in that it isn’t merely limited to China. Its namesake website is offered in various different languages, and it even offers free worldwide shipping on some of its pricier items including wedding gowns. This is a Chinese e-tailer that is more along the lines of stateside e-commerce initiatives, and that may help it fare better than some of the China-centric online retailers that stumbled after hot starts. In short, you can kick the tires yourself.
Credit: Lightinthebox Holding Co Ltd-ADR (NYSE:LITB)
Are investors finally ready to buy back into China? Are the high growth rates and often reasonable valuations enough to outweigh the geopolitical risks of buying into Chinese growth stocks?
Let’s take a closer look at some of the winners from last week.
|Company||June 7||Weekly Gain|
|Kandi Technolgies Corp. (NASDAQ:KNDI)||$5.69||52%|
|JinkoSolar Holding Co., Ltd. (NYSE:JKS)||$9.20||16%|
|E Commerce China Dangdang Inc (ADR) (NYSE:DANG)||$7.34||14%|
Kandi was China’s biggest winner, soaring 52% after the country approved the company’s first all-electric sedan developed in partnership with automotive titan Geely for road use. Kandi Technolgies Corp. (NASDAQ:KNDI)’s earlier products rely largely on swapping out batteries at local utility providers, but naturally there’s plenty of upside as it expands into more conventional electric sedans. It’s certainly too early to start calling this the Tesla Motors Inc (NASDAQ:TSLA) of China, but it has a strong partner in Geely as it tries to make a push for electric vehicles in a country where automotive emissions pollution can use some curbing.
JinkoSolar Holding Co., Ltd. (NYSE:JKS) moved sharply higher after posting a narrower quarterly loss than Wall Street was expecting. Solar energy has been out of favor, but it’s hard to ignore the 36% spike in shipments that JinkoSolar sported in its latest report as a sign that business is starting to pick up. Yes, JinkoSolar is losing a lot money, but when the market’s settling for a deficit of $1.66 a share and you come through with just $0.92 a share in red ink, the market will more often than not applaud the performance.