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Follow Us Drives Online Retailers’ Rally as Vipshop Advances Inc. led gains among Chinese online retailers traded in the U.S. after Barclays Plc. and Jefferies Group LLC recommended investors buy shares of the Asian country’s second-largest e-commerce site. rose 4.1 percent to $29.69, the highest level on record, extending to 56 percent its surge since an initial public offering in May. Vipshop Holdings Ltd., a web retailer of discounted fashion goods, climbed to the highest price since 2012, while Jumei International Holding Ltd. advanced for a seventh day. The Bloomberg China-US Equity Index gained 1 percent to 107.01 in New York, the highest close in seven months.

Analysts at Barclays and Jefferies started coverage of with buy recommendations, citing the Beijing-based company’s leading position in the online retail market and its partnership with Tencent Holdings Ltd., China’s biggest Internet company by market value. Piper Jaffray Cos. and Cowen & Co. gave the stock a new rating equivalent to hold. Alibaba Group Holding Ltd., China’s biggest e-commerce operator, is preparing for an IPO in the U.S.

“ is trading on positive market sentiment for Chinese e-commerce names before Alibaba’s IPO,” Josef Schuster, the founder of IPOX Schuster LLC in Chicago, said by phone. “Ahead of Alibaba’s IPO, demand for China-linked exposure is rising.”

Business Model

Stocks also gained after data showed China’s manufacturing expanded in June at the fastest pace this year. The iShares China Large-Cap ETF, the largest Chinese exchange-traded fund in the U.S., advanced 0.8 percent to $37.32, paring its 2014 drop to 2.7 percent. The Standard & Poor’s 500 Index climbed 0.7 percent to a record.

Beijing-based has a business model similar to Inc.’s, meaning it handles much of its own logistics for package delivery, rather than providing a platform connecting buyers and sellers the way Alibaba does. Four analysts out of 10 rated a buy while six gave it a hold, according to data compiled by Bloomberg. Its ADR price may rise to $32.09, according to the average projection of nine analysts.

Tencent, seeking to build a stronger competitor to Alibaba, bought a 15 percent stake in and agreed to purchase an additional 5 percent after JD’s IPO.

‘Preliminary’ Stage

“China’s e-commerce industry is still in its preliminary development stage and is one of the biggest players,” Tian X. Hou, the founder of TH Capital LLC, a research firm focusing on the Chinese Internet sector, said by phone in New York. “ isn’t profitable yet, but it will eventually make money as it expands its scale and market share. It isn’t clear yet how much its partnership with Tencent will help the business.”

Vipshop, based in Guangzhou, climbed 4.2 percent to $195.59, the highest since its U.S. listing in March 2012. Jumei, which sells beauty products, added 1.1 percent to $27.51, capping a seven-day advance of 19 percent.

The Purchasing Managers’ Index was at 51.0, the National Bureau of Statistics and China Federation of Logistics and Purchasing said yesterday in Beijing. The figure matched analysts’ median estimate and increased from May’s 50.8. A similar index from HSBC Holdings Plc and Markit Economics rose to 50.7 from the previous month’s 49.4. Numbers above 50 signal expansion.

The Shanghai Composite Index gained 0.1 percent to a two-week high of 2,050.38, while markets in Hong Kong were closed for a holiday.

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