(Yicai Global) Sept. 17 -- Shares in Chinese e-commerce platform Pinduoduo soared 34 percent last week after hitting a new high and making its founder Colin Huang worth more than Lei Jun, Chief Executive at Xiaomi, if only for a day.
The Shanghai-based firm's stock [NASDAQ:PDD] reached almost USD30 on Sept. 13, giving it a USD33.2 billion market cap and making it the sixth largest Chinese tech firm by such a measure, placing it ahead of one of the world's biggest gaming firms NetEase (USD26.6 billion) and online protector 360 Security Technology (USD26.5 billion).
At the price peak, Huang, known in Chinese as Huang Zheng, was worth around USD15.5 billion, compared with Lei's wealth of USD14.9 billion, according to the Securities Daily. Both executives' firms recently went public overseas, with Tencent-backed Pinduoduo heading Stateside in July and consumer electronics maker Xiaomi listing in Hong Kong last month.
Pinduoduo's gains came amid similar results across the board. Shares in some 120 of 198 Chinese firms listed in the United States rose last week, with electric carmaker Nio and real estate services provider Leju Holdings both gaining more than 30 percent. Nio listed on Sept. 11 and within two days had seen its share price shoot up nearly 76 percent, though it has since retreated slightly.
Many Chinese stocks listed in America are for companies that are leaders in their fields, analysts said, which instills confidence in investors as they have proven performance and profit patterns, though the firms had been performing somewhat sluggishly until recently.
Pinduoduo was also likely helped out by a research report from Goldman Sachs, in which analyst Piyush Mubayi said the shares were worth USD31.9 apiece and described the company as the world's fastest growing internet company. Goldman expects Pinduoduo to turn into the green next year with a compound annual growth rate of 73 percent through 2021, according to the report, which said the firm is in an excellent position with its applications and the social network run by major shareholder Tencent Holdings.
Securities Daily also suggested the gains may have come as a result of rival NetEase setting up an online store in Pinduoduo. NetEase's e-commerce site NetEase Yanxuan agreed to found the digital shop in the second half of last year, and it is now online with 76 items available for sale, according to the Securities Daily report.
Editor: James Boynton