Could coronavirus lockdown have big upside for China’s new economy stocks as users and smartphones become BFFs?
- Investors piling into stocks linked to online education, digital medical services, and remote working
- Massive quarantines, ban on big gatherings in China could be as transformative as Sars for e-commerce, many traders bet
It’s never happened before: more than 50 million people in the world’s most wired country locked down at home with their smartphones turned into lifelines. Some analysts think this may later be recognised as a watershed moment, marking the start of a new era for online services – and the stocks closely tied to them.
Hong Kong-listed companies linked to online games, digital medical services, remote working and distance education are among new economy stocks that soared last week, as investors sensed a transformative moment might be at hand – literally – as China’s unprecedented decision to keep tens of millions of people quarantined in their flats to combat a deadly new virus deepened mainlanders’ intimacy with their smartphones.
With countless Chinese schools closed, NetDragon Websoft, a Chinese online gaming company offering online learning products, rallied for six straight sessions, running up a gain of nearly 48 per cent.
Cloud services and office software stocks surged on demand from remote work arrangements.
Kingsoft, a software company with cloud and business management services, reached a 52-week high at HK$29.5 on Friday, closing the day ahead 9.8 per cent and fetching a 20 per cent gain for the week.
Cloud services vendor Kingdee International Software closed at a one-month high on Friday, posting a weekly gain of 17.7 per cent.