China ADR Weekly Wrap September 20-24, 2010

September 25, 2010 (Chinavestor) – China and most of Asia saw their trading weeks shortened by holiday festivities and that led to the Shanghai Composite (SHA:000001) finishing the week basically flat and the Hang Seng Index (INDEXHANGSENG:.HSI) notched a small gain, but the real fireworks occurred in the U.S. The Dow Jones Industrial Average (INDEXDJX:.DJI) surged 2.4% on the week and remains on pace for its best September performance since 1939. Impressive is the fact that stocks continue to rally while gold made new all-time highs on a daily basis, briefly topping $1,300 an ounce on Friday. Twenty seven out of thirty components of the Dow Jones Industrial Average (INDEXDJX:.DJI) advanced with Alcoa (NYSE:AA) taking a lead with a 9.2 percent surge.

Hong Kong traders got clues from the U.S. sending airliners and energy stocks higher but power companies fell following a large ten perce surge a week earlier. All listed large cap power generators fell; Huadian Power (HKG:1071), Datang Power (HKG:0991) and Huaneng Power (HKG:0902) tumbled as investors took profits following the big surge last week. Citi reported talks between regulators and representatives of power companies about possible tariffs increase. A report that profitability of the airline industry is going to exceed that of last year sent representatives of the sector surging. China Southern Airlines (HKG:1055), the largest Chinese carrier, rose 6.4 percent followed by Air China (HKG:0753), China's flagship carrier, and China Eastern Airlines (HKG:0670). TravelSky Technology Limited (HKG:0696), an IT firm providing services for the aviation industry, surged 7.5 percent.

Trading was halted for most of the week in Shanghai, where metals and construction materials fell on a property squeeze concern. Wen Jiabao, Premier of China, hinted the introduction of additional measures to tame the real estate sector unless prices fall. Investors rotated out of the sector and poured money into consumer stocks such as autos and insurance companies. SAIC Motor (SHA:60010), the largest Chinese auto maker, rose 4.9 percent for the week followed by Ping An Insurance (SHA:601318) and China Pacific Insurance (SHA:601601). But Jinduicheng Molybdenum Co., Ltd. (SHA:601958) and Jiangxi Copper (SHA:600362), the largest producer of the metal, tumbled 7.7 percent and 7.5 percent, respectively.

Key NYSe and NASDAQ listed stocks of the week are; China Real Estate Information (Nasdaq:CRIC), Baidu.com (NASDAQ:BIDU) and New Oriental Education & Tech. Group (NYSE:DU) among large caps.

Summary of events on the DJIA, Hong Kong and Shanghai, 9/20/2010 - 9/24/2010

Speaking of all-time highs, that's the lofty status the Claymore/AlphaShares China SmallCap ETF (NYSE:HAO) rose to on multiple occasions this week. HAO made a new all-time high on Friday at $29.95 before settling at $29.85, up 2.5% for the week. The PowerShares Golden Dragon Halter USX China ETF (NYSE:PGJ) jumped almost 3.5% while the iShares/FTSE Xinhua China 25 Index (NYSE:FXI) rallied 2%.

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China Real Estate Information (Nasdaq:CRIC) led the large-cap winners with a weekly gain of almost 16% after rival SouFun's (NYSE:SFUN) IPO was well-received by investors. China Real Estate Information (Nasdaq:CRIC) jumped 5.5% on Friday on volume that was almost triple the daily average.

Internet names were strong as well with Baidu (Nasdaq:BIDU) surging more than 14% while Sohu.com (Nasdaq:SOHU) followed with a gain of 11.4%. Select solar names shined, too, led by a 13.5% jump for JA Solar (Nasdaq:JASO). LDK Solar (NYSE:LDK) was no slouch either, soaring 10.35%. E-House (NYSE:EJ) was a solid performer as well, adding 11.6% for the week. VanceInfo Technologies (NYSE:VIT) impressed with a gain of over 10%.

Chinese airlines soared as China Southern (NYSE:ZNH) and China Eastern (NYSE:CEA) posted gains of 9.6% and 8.85%, respectively. Synutra (Nasdaq:SYUT) rounds out the big winners among large-caps, soaring 8.8%.

The large-cap losers were very manageable this week. New Oriental Education (NYSE:EDU) plunged 6.5% to lead that group. CNinsure (Nasdaq:CISG) lost almost 3%, but that was the only other Chinese large-cap to lose more than 1% for the week. City Telecom (Nasdaq:CTEL), Huaneng Power (NYSE:HNP), China Unicom (NYSE:CHU) and China Yucahi (Nasdaq:CYD) were all in the red for the week, but all lost less than 1%.

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It was another exciting week for Chinese small-caps as Gushan Environmental Energy (NYSE:GU) soared almost 35.5% on some acquisition news. Noah Education (NYSE:NED) rallied by more than 23% and China Precision Steel (Nasdaq:CPSL) posted a weekly gain of more than 21%. Give HQ Sustainable Maritime Industries (AMEX:HQS) some credit. That stock advanced by more than 14% on no news.

Chinex (Nasdaq:CHDX) jumped by 13.3% while VisionChina Media (Nasdaq:VISN) surged 12.2%. UTStarcom (Nasdaq:UTSI) was a curious gainer, adding 9.6% on the week, with almost all of that coming on Friday when the stock popped by 8.6% on no news and volume that was nearly double the daily average.

Origin Agritech (Nasdaq:SEED) enjoyed a pop of nearly 9% while eLong (Nasdaq:LONG) and Sutor Technology (Nasdaq:SUTR) round out the small-cap winners with gains of almost 8% each.

The small-cap losers were also easy to deal with. WSP Holdings (NYSE:WH) slipped more than 9% despite firming oil prices. China Information Technology (Nasdaq:CNIT) shed 8.7%. China-Biotics (Nasdaq:CHBT) was the only other small-cap to lose more than 7%, tumbling 7.4% for the week. The9 Ltd. (Nasdaq:NCTY) dropped 5.75% while GigaMedia (Nasdaq:GIGM) and Wonder Auto (Nasdaq:WATG) both gave up more than 5%.

RINO International (Nasdaq:RINO) was back in bear territory this week, slumping by almost 5%. Fuqi International (Nasdaq:FUQI) and Xinhua Sports & Entertainment (Nasdaq:XSEL) remain favorite targets of the bears as both names dropped by more than 4%. Jinpan International (NYSE:JST) caps the small-cap losers with a loss of just 3.33%.

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China ADR stock research

China ADR Weekly Wrap September 20-24, 2010