On Friday, tech stocks led the pre-market rally in Chinese stocks after Beijing hinted at an economic stimulus package to accelerate growth. This raised hopes of easing restrictions on the internet and tech companies. The ruling Communist Party said the government would declare measures to support economic growth.
Bloomberg reported that China plans to hold a symposium with major tech companies after the Labor Day holiday. Beijing is also discussing the logistics with US regulators to allow on-site audit inspections of US-listed Chinese companies.
On Friday, the Xi Jinping-led Communist Party said the government would consider tax cuts, new monetary policy tools, investment and other supportive policies to spur growth.
After the announcement, shares of Chinese tech companies rallied in the US market. Here we discuss five Chinese internet and technology stocks that rebounded on Friday.
Alibaba Group Holding Limited (NYSE:BABA)
Market cap: US$244.3 billion
Shares of Hangzhou, China-based Alibaba jumped 12.17% to US$101.97 as of 6:12 a.m. ET in premarket. Alibaba is one of the largest e-commerce companies in the world by merchandise volume. The title plunged 61.18% in one year due to the limitations imposed by the authorities.
The stock closed at US$90.91 on April 28, with a gain of 2.93%. It has a P/E of 24.37 and a one-year forward P/E of 13.65.
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On March 21, the company announced the increase in its share buybacks from US$15 billion to US$25 billion, indicating the company’s confidence in growth. The share buyback program is in effect for two years until March 2024.
For the quarter ended December 31, 2021, the company recorded revenue of RMB 242,580 million (US$38,066 million), a 10% year-on-year increase. Net income was RMB 19,224 million (US$3,017 million), down 75% year-on-year. Diluted profit per ADS was 7.51 RMB (1.18 USD).
This stock traded between US$239.22 and US$73.28 in one year.
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JD.com, Inc. (NASDAQ: JD)
Market cap: US$90.15 billion
Beijing-based JD.com is the second-largest e-commerce company after Alibaba by transaction volume. The stock was trading up 14.34% to hit US$66.10 at 6:13 a.m. ET. On April 28, the stock closed at US$57.81 with a gain of 0.68%. Its one-year forward PER is 46.31.
The supply chain-based technology and services provider recorded net revenue of RMB 951.6 billion ($149.3 billion) for the fiscal year ended December 31, 2021, an increase of 27. 6% compared to the previous year. It incurred a net loss attributable to common shareholders of RMB 3.6 billion ($0.6 billion) from a net profit of RMB 49.4 billion in fiscal 2020.
Diluted net loss per ADS for fiscal 2021 was RMB 2.29 ($0.36) compared to diluted net profit per ADS of RMB 31.68 for fiscal 2020.
This stock has traded between US$92.69 and US$41.56 over the past 52 weeks.
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NetEase, Inc. (NASDAQ: NTES)
Market capitalization: 245 billion US dollars
NTES stock was up 6.80% to hit US$97.50 at 6:13 a.m. ET on Friday. NetEase is an online service provider in China. Launched in 1997 as an internet portal service, its current services include online and mobile gaming, cloud music, live streaming, online education, media, advertising, email and commerce electronic. The company is headquartered in Hangzhou, China.
This stock traded between US$120.84 and US$68.62 in one year and closed at US$91.29 on April 28 with a gain of 2.5%.
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NTES has a P/E of 23.53 and a forward P/E for one year of 23.71. With a dividend yield of 1.81%, its annualized dividend is US$1.61.
For the fiscal year ended December 31, 2021, its net income amounted to RMB 87,606.0 million (US$13,747.3 million) compared to RMB 73,667.1 million for fiscal 2020. Net profit attributable to shareholders amounted to 16,856.8 million RMB (2,645.2 million USD). ) compared to RMB 12,062.8 million for FY2020.
The company reported net earnings of $0.80 per share ($3.98 per ADS) for fiscal 2021, compared to $0.57 per share ($2.86 per ADS) for fiscal 2020.
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iQIYI, Inc. (NASDAQ: IQ)
Market cap: US$2.88 billion
Beijing-based iQIUI is an online entertainment service provider. Its services include Internet video, online games, online literature, live streaming, animations, e-commerce and social media platforms. iQIYI Inc. stock rose 12.57% to US$3.76 at 6:13 a.m. ET.
The company recorded revenue of RMB 30.6 billion ($4.8 billion) in the fiscal year ended December 31, 2021, an increase of 3% from the previous year. Net loss attributable to iQIYI was RMB 6.2 billion (US$968.1 million), compared to a net loss attributable to the company of RMB 7.0 billion in fiscal 2020.
IQ stock closed at US$3.34 on April 28. It traded between US$16.12 and US$1.86 in one year.
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Weibo Corporation (NASDAQ:WB)
Market cap: US$5.03 billion
Weibo is a social media platform in China. He is based in Beijing. Its stock rose 8.42% to US$23.04 at 6:14 a.m. ET in premarket.
The stock closed at US$21.25 on April 28 with a gain of 1.43% and has a P/E of 11.49 and a one-year forward P/E of 8.62.
For the fiscal year ended December 31, 2021, its net revenue was US$2.26 billion, a 34% year-over-year increase from US$1.69 billion in fiscal 2020. The company’s operating profit was US$697.4 million.
Its net income attributable to the company was $428.3 million or $1.86 per diluted share, compared to $313.4 million or $1.38 per diluted share in fiscal 2020.
This stock has traded between US$64.70 and US$18.62 over the past 52 weeks.
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At the end of the line :
During the morning trading session, Chinese stocks were up in the US and Hong Kong. The Hang Seng Tech Index rose about 10%. However, market volatility could continue until the authorities announce their new monetary policy guidelines.