Chinese stocks traded in New York posted the biggest monthly gain since November as Internet companies from Youku Tudou Inc. to E-Commerce China Dangdang Inc. proved profitable.
The Bloomberg China-US Equity Index of the most-traded Chinese stocks in the U.S. rallied 5.4 percent to 102.37 in February. Youku, owner of China’s biggest video websites, extended its monthly gain to 15 percent after reporting its first profit ever. Dangdang, the nation’s largest online book retailer, surged 49 percent after posting net income of $3.6 million for the period ended Dec. 31.
Youku reported fourth-quarter adjusted net income of $7.3 million, the first profit since its U.S. listing in 2010. Mobile-related revenue more than tripled to 10 percent of the total from the previous quarter as Youku’s applications started displaying video advertisements, the company said.
“It’s Youku’s long-awaited profitability that helped drive its stock price,” Henry Guo, a senior analyst at ABR Investment Strategy LLC, said Feb. 28 by phone from San Francisco. “The results also showed Youku’s mobile business has grown, contributing more to its revenue.”
The iShares China Large-Cap ETF, the largest Chinese exchange-traded fund in the U.S., rallied 2.3 percent to $35.39 for the month, the most since November.
Youku surged to $33.19. Sales rose 42 percent to $148.9 million, beating the average of eight analysts’ estimates tracked by Bloomberg.
Dangdang jumped to $14.06, the highest level since July 2011. The Beijing-based company posted a profit for the first time in 11 quarters while revenue rose 22 percent from a year earlier. At least six analysts surveyed by Bloomberg had projected a net loss and predicted lower sales.
Sohu.com Inc., owner of China’s third-largest search engine, rallied 17 percent to $84.99, the biggest monthly gain since September. Chief executive officers of Sohu and Tencent Holdings Ltd. have conducted meetings for a potential online video partnership, a report from market research firm Marbridge Consulting Ltd. said Feb. 28, citing a person “close to both parties.”
NQ Mobile Inc., the Beijing-based company accused of inflating sales by Muddy Waters LLC, sank 8.5 percent to $19.41 on Feb. 28. About 11 million NQ Mobile shares traded, more than three times the daily average over the past year, according to data compiled by Bloomberg. The decline trimmed its monthly advance to 14 percent.
The Shanghai Composite Index advanced 1.1 percent to 2,056.30, while the Hang Seng China Enterprises Index in Hong Kong added 0.7 percent to 9,891.42. Both gauges posted the biggest monthly gains since November.