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.
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% |
Source: Barron’s.
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.
There are some Chinese e-tailers growing faster, and some are even profitable. However, E Commerce China Dangdang Inc (ADR) (NYSE:DANG)remains one of the most actively traded dot-com names in China as the poster child of Internet retail in the world’s most populous nation.
Youku Tudou Inc (ADR) (NYSE:YOKU) issued a press release touting its market-share gains. The leading video streaming provider in China leaned on June metrics from iResearch showing that Youku attracted more unique visitors than its two nearest competitors combined. Youku averaged 14 million daily unique visitors in June. Qiyi and PPS registered 7.9 million and 6 million viewers, respectively.
Investors won’t have to wait long to get an even better snapshot of Youku Tudou Inc (ADR) (NYSE:YOKU). It reports quarterly results on Thursday night.
Renren moved higher after encouraging news by other companies in the social networking space. Facebook Inc (NASDAQ:FB)‘s push to a fresh 52-week high — reclaiming its IPO price for the first time since the day it went public 15 months ago — likely helped woo investors back into the volatile realm of social networking, but we also had China’s own YY Inc (ADR) (NASDAQ:YY) coming through with a better-than-expected profit as revenue more than doubled.
Renren is still at least a couple of years away from turning a profit, but it did schedule its annual shareholder meeting for later this month.
Betting on China
There’s plenty of growth still to be had if you buy the right Chinese growth stocks.
The article 5 Chinese Stocks That Soared Last Week originally appeared on Fool.com.
Longtime Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Ctrip.com International and Facebook. The Motley Fool owns shares of China Mobile, Ctrip.com International, and Facebook.
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