Why China's Small-Cap Stocks Like Kingsoft and Joyy Are Soaring Today
It's a good day for most stocks. But it's a great day for most Chinese stocks. Shares of Zhihu (NYSE: ZH) are up an incredible 64% as of 1:46 p.m. ET Wednesday, outpaced by the 70% gain Kingsoft Cloud Holdings (NASDAQ: KC) investors are currently enjoying. Joyy (NASDAQ: YY), Chindata Group Holdings (NASDAQ: CD), and Kanzhun Limited (NASDAQ: BZ) are up 54%, 50%, and 36% (respectively) as they -- and most of China's stocks -- bounce back from a drubbing suffered earlier this week in response to the country's resurging COVID-19 pandemic and the subsequent lockdowns put back in place as a result.
Don't get too excited. In most of the aforementioned cases today's big rallies only reclaim value that had been lost over the course of the first two days of this week. Investors initially panicked in response to China's rekindled spread of the COVID-19 within that country, and panicked some more following J.P. Morgan analysts' comment that China had now become "uninvestable,"... at least for the time being.
The only company-specific news from any of these names that could be linked to today's rallies comes from Kingsoft and Joyy. The former announced it's considering listing its stock in Hong Kong in addition to its current Nasdaq listing, which is broadly bullish since it adds liquidity and offers access to more investors. Meanwhile, social media name Joyy released fourth-quarter and full-year numbers that are compelling. The company turned its first full-year operating profit since selling YY Live to China's search engine giant Baidu.
Source Fool.com
