It's off to the races for investors in Chinese IPOs! China State Construction Engineering (CSCE) came to market in Shanghai on Wednesday -- and showed a stunning 56% first day gain -- rather impressive for the largest IPO globally since Visa (NYSE: V) went public last year. Demand for the shares wasn't lacking -- the retail portion of the offering was nearly 50 times oversubscribed! But that performance pales compared to Sichuan Expressway, which floated on Monday, registering a stunning 203% first-day gain.
It's contagious
The fever has spread to Hong Kong, where BBMG, Beijing's largest cement supplier, gained 56% on its Wednesday debut -- retail demand for shares exceeded supply by 775 times.
Chinese authorities ended a 10-month ban on IPOs in June, encouraged by strong market performance (the SSE Composite Index is up over 80% year-to-date).
What about Chinese stocks that are available to U.S. investors?
To answer that, I put together my own market-weighted index made up of the 43 Chinese companies traded on major U.S. exchanges with a current market value greater than $500 million. These are the results in terms of returns and valuation:
Year-to-Date Total Return
Quarter-to-Date Total Return
Price-to-Book Value
Baidu (Nasdaq: BIDU)
169%
17%
22.00
Yingli Green Energy (NYSE: YGE)
129%
3%
2.78
Suntech Power (NYSE: STP)
65%
8%
2.46
JA Solar (Nasdaq: JASO)
14%
6%
1.23
Focus Media (Nasdaq: FMCN)
(7%)
5%
0.94 Continued... |