June 21, 2010 (Chinavestor) Investors wonder how do Chinese ADRs perform following the Yuan relaxation. One thing is for sure: large cap Chinese stocks rose, almost universally, while small caps remained sensitive to stock specific news.
Looking at larger cap Chinese ADRs at noon, stocks with market capitalization of $500 million or more, one of the most striking development is that almost all of these China stocks advanced. This is different from smaller names where over ten percent of all Chinese names are under water.
UTStarcom (NASDAQ:UTSI) advanced 14.2% following a strategic partnership with China Merchants Bank. Winner Medical (NASDAQ:WWIN) rose 4.8 percent making up for losses in the last two weeks. Gushan Environmental Energy Limited (NYSE:GU) rose 6.5%, just as foretold in the overbought report this morning.
Among large caps, E-House Holdings (NYSE:EJ) and Ctrip.com Int. (NASDAQ:CTRP) advanced the most followed closely by Perfect World (NASDAQ:PWRD) and China Southern Airlines (NYSE:ZNH). Another internet and online game related stock, NetEase.com Inc. (NASDAQ:NTES) rose 6.59 percent by noon.
It was obvious that Chinese airliners are gong to outperform on Monday, based on their strong showing in Hong Kong earlier the day. The yuan revaluation helps domestic players to report more profits in dollars, boosting their ADR price. Shares of China Eastern Airlines (NYSE:CEA) (HKG:0670) rose 7.14% in Asia while China's largest carrier by fleet size, China Southern Airlines (NYSE:ZNH) (HKG:1055) rose 6.53%. China shares soar in Asia on Yuan Peg End
Chinese real estate firms outperformed in Shanghai earlier the day, Poly Real Estate (SHA:600048) jumped 5.1% in Shanghai on Monday. So it came as no surprise that E-House Holdings (NYSE:EJ), a real estate service provider and an explosive NYSE listed China stock, caught fire on Monday.
Ctrip.com Int. (NASDAQ:CTRP) is a Chinese blue chip with quality earnings and strong balance sheet on its back. Whenever markets do well, Ctrip has a chance to shine. Additionally, the overbought monitor caught the momentum of Ctrip.com Int. (NASDAQ:CTRP) on time, no wonder we placed it on the "BEST" buy list last Friday. What an "easy" way to get away with over 8% return just in one day!
Perfect World (NASDAQ:PRWD) is a Chinese online game developer and operator with strong profitability and a lackluster performance following 2010 first quarter report. We said that following the report that "Looking forward, this sock offers trading opportunities for the smart investor. For one, current stock price under $26 is not only a significant drop from last week but is below 10-DMA, 30-DMA and 50-DMA as well. While this might be a bearish signal for many, we're of a view that the stock is much better from a fundamental point of view than its technicals suggests." Detailed analysis of PWRD following 2010 Q1: Perfect World tumbles on growth concerns.
NetEase.com Inc. (NASDAQ:NTES) is another online game developer and operator - and much more - that caught fire on Monday. Shares of the company rose 6.59% for a reason. NetEase.com (NASDAQ:NTES) is the most profitable Chinese online gamer yet it underperformed relative to the overall market as the sector fell out of investors' favor. Shanda Interactive (NASDAQ:SNDA), another industry leader, gas been on the oversold screen for the last five days!
When it comes to small cap big movers on Monday, UTStarcom (NASDAQ:UTSI) is the best with a 14.2% jump! China Merchants Bank and UTStarcom signed a partnership deal, effective for three year, under which both companies are expected to see strong profit growth. Details: UTStarcom Inks Financing With China Merchants.
Winner Medical (NASDAQ:WWIN), a Chinese medical supplier maker, rose 4.8 percent. This is a relatively young China stock on the market with a positive outlook. I personally had a chance to meet its founder, CEO and Chairman last month - and was impressed by it. Read coverage: Interview with Jianquan Li, CEO of WWIN
Gushan Environmental Energy Limited (NYSE:GU) rose 6.5%, exactly as predicted this morning. "Gushan Environmental Energy (NYSE:GU) is expected to jump on Monday - along with the rest of the energy sector. Shares of Petrochina (NYSE:PTR), the largest Hong Kong listed China company, jumped 4.7% earlier today, the most in four years. Expect GU to outperform the broad market on Monday." China stocks advance on Yuan peg relax