Penny Stocks To Watch As Chinese-based Companies Surge Friday
One of the topics of discussion recently has been on international relations & some penny stocks may have show pent-up momentum in a few names. The previous administration set out to change U.S.-China trade deals. Tensions rose, and the rest is history. Now, with a new administration, the current dealings in place are under review. While there was a risk of many Chinese companies being delisted from U.S. exchanges, that fear seems to have subsided.
In headlines on Friday morning, news out of Beijing showed bigger moves being made in China’s exchanges. Specifically, Reuters reported that China’s securities regulator gave the go-ahead for a merger between Shenzhen Stock Exchange’s main board with the SME board. But this isn’t the only catalysts that may be behind the recent surge in Chinese stocks. A burgeoning tech industry has helped fuel more attention on public companies in China.
Overnight, shares of China’s Kuaishou Technology skyrocketed in their Hong Kong debut, jumping nearly 200% from their issue price. The short video app company aims to take advantage of the momentum from other apps like TikTok and Instagram Reels. It also could benefit from the continuation of things like distance learning. Right now, China leads the way in mass-scale e-learning solutions, according to a report from WIRED.
With this mix of tech momentum, e-Learnings, and an overly bullish stance on penny stocks, Chinese names are surging in early trade on Friday. The biggest question is, can it last? Chinese tech stocks are well-known for their volatility. While some may have established a more clear trend, others remain choppy. So if you’re looking for top Chinese penny stocks to buy today, keep that in mind.
Chinese Penny Stocks To Watch
- Tuniu Corporation (NASDAQ: TOUR)
- Sunlands Technology Group (NYSE: STG)
- RYB Education Inc. (NYSE: RYB)
- Meten EdtechX Education Group Ltd. (NASDAQ: METX)
- Blue Hat Interactive Entertainment Technology (NASDAQ: BHAT)
One of the companies we’ve discussed previously as an epicenter penny stock to watch is Tuniu. The company is an online leisure travel operator in China. One of the industries impacted across the world has been travel. Obviously, thanks to the pandemic, companies like Tuniu were hit with the brunt of the market sell-off last March.
Since then, TOUR stock has seen some momentum come in, but nothing has resulted in a significant bullish or bearish trend. In fact, for the most part, the penny stock has treaded around the $1 level for most of the second half of 2020. Recent excitement in Chinese tech has helped lift sentiment in industry names.
There haven’t been any new updates in some time, besides its last quarterly update in December. However, it may be sweeping sympathy momentum helping give TOUR stock its pep on Friday.
Sunlands Technology Group
Sympathy momentum played a big role in shares of Sunlands Technology as well. Shares of the Chinese stock surged to highs of $3.18 during premarket trading Friday morning. Once again, there weren’t any headlines or filings to pair with the move. The company is one of China’s online post-secondary and professional education platforms.
Late last year, the company emphasized a focus on exploring new opportunities in master’s degree-oriented programs. “The growth of master’ s degree-oriented programs in terms of gross billings was phenomenal, registering 93.3% year-over-year and 48.4% quarter-over-quarter,” according to the company in its last quarterly update.
RYB Education Inc. (NYSE: RYB)
Why is RYB Education moving on Friday? In my opinion, this is another momentum-fueled name influenced by news out of China. RYB is another education company. It provides early childhood services in China. Its solutions are integrated into courses at kindergartens and play-and-learn centers. The company also offers solutions for at-home educational products & services.
While the pandemic put a pause on its in-person, play-and-learn offering, over 90% of the Company’s franchise play-and-learn centers have resumed operations. What’s more, is that based on its last quarterly report, the company realized year-on-year growth of enrolled students in its system. The number of students enrolled at directly operated facilities was 33,760 compared with 30,184 as of September 30, 2019. However, net revenues suffered thanks to pandemic restrictions.
Needless to say, it could be one of the hot penny stocks to watch in light of this recent sympathy sentiment.
Meten EdtechX Education Group Ltd. (NASDAQ: METX)
Shares of Meten EdtechX also surged on Friday. Sympathy sentiment clearly played a role. But there may also be a fundamental catalyst at play. The company announced that it invested RMB20 million in course development of “dual-teacher classroom” learning. It also explained that its junior ELT services maintain strong growth. Meten said that its junior ELT services’ billing increased by 200% in January 2021 compared to the same period last year.
Since the company is an English language training service provider in China, you can see the connection with the market’s current sympathy activity. Meten has more than just sympathy to rely on right now, however. Will this be a determining factor in whether or not its trend continue?
Blue Hat Interactive Entertainment Technology (NASDAQ: BHAT)
Blue Hat is another Chinese penny stock to watch on Friday. Similar to Meten, Blue Hat has reported recent developments. So it’s not as quiet as the other names on this list. This week the company announced entry into a securities purchase agreement with two institutional investors. This provided for the purchase and sale of 7,160,000 of its ordinary shares at $1.06 per share in a registered direct offering. This brought in just under $7.6 million before fees.
The Chinese entertainment technology company also reported preliminary Q4 financial results last week. Total revenues increased more than 70% to roughly $20 million, compared to just $11.8 million in the prior-year period. Blue Hat said that these were driven by its new Internet Data Center business following the strategic acquisition of Xunpusen Technology Co., Ltd. last year.
Something to keep in mind is that many of these stocks are moving based on sympathy sentiment. Usually, this involves higher levels of speculation and hype. So if any of these or other Chinese penny stocks are on your list today, please keep that in mind. Scenarios like these tend to involve higher levels of risk and volatility.