Chinese growth stocks stormed higher last week.
NQ Mobile Inc (ADR) (NYSE:NQ) — up 15% on the week — saw its amazing hitting streak come to an e (NYSE:DANG)nd on Thursday. Shares of the mobile Internet services provider closed higher for 14 consecutive trading days before proving mortal.
The stock nearly doubled in July, and the catalyst that kicked off this monstrous rally came when it offered up preliminary quarterly results that were well ahead of its earlier outlook. NQ Mobile Inc (ADR) (NYSE:NQ) shares have gone on to deliver double-digit percentage gains for three weeks in a row.
The good news kept coming this past week, as NQ Mobile Inc (ADR) (NYSE:NQ) Mobile renewed its deal with leading wireless carrier China Mobile Ltd. (ADR) (NYSE:CHL) to provide malware protection and other online security services. An NQ Mobile subsidiary also was tapped as a game provider for China Mobile’s Game Center platform.
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 other winners from last week.
|Company||Aug. 2||Weekly Gain|
|Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP)||$43.30||20%|
|E Commerce China Dangdang Inc (ADR) (NYSE:DANG)||$10.54||19%|
|Youku Tudou Inc (ADR) (NYSE:YOKU)||$25.02||18%|
|Renren Inc (NYSE:RENN)||$3.78||17%|
Let’s start with Ctrip.
China’s leading online travel portal took off after posting strong quarterly results.
Net revenue climbed 28% to $203 million, well ahead of the $190.4 million that Wall Street was expecting. The news got even better on the bottom line, as Ctrip’s adjusted profit of $0.36 a share was roughly twice as much as analysts were projecting.
Ctrip’s guidance for the current quarter calls for revenue to grow at a more modest 20% to 25% clip. Then again, that’s the same outlook it offered for the second quarter, and we saw how well that played out.
E Commerce China Dangdang Inc (ADR) (NYSE:DANG) broke into the double digits for the first time since April of last year, soaring 19% on the week.
The popular Internet retailer reports quarterly results later this month. It won’t impress on the bottom line, but analysts do see E Commerce China Dangdang Inc (ADR) (NYSE:DANG)’s deficit narrowing substantially. Wall Street’s bracing for a net loss of $0.15 a share. Dangdang has actually beaten analyst estimates in the three prior periods, so it wouldn’t be a surprise if its quarterly deficit is even smaller than that.