In Bruising Year for China Stocks, Some Still Made Money

(AF) A bruising year for China tech and US-listed stocks didn’t mean it was impossible to make money in China equities in 2021.

The Chart of the Day, below, shows that new energy, small-cap and fintech sectors all produced stellar returns.

New energy stocks, tracked in the chart by the E Fund CSI New Energy ETF, led the field with a 61.7% return. Its surge was powered by companies including battery maker Contemporary Amperex Technology Co Ltd. (+42%), and energy storage company Sungrow Power Supply Co. (77%).

China’s small caps also did well with the MSCI China A Onshore Small Cap Index, tracking A-share securities listed in Shanghai and Shenzhen, rising 25.9%, maintaining strong momentum from last year. Among its star performers were Zhejiang Yongtai Technology Co. (+336%) and Do-Fluoride New Materials Co. (+113%).

Small- and medium-sized enterprises ”are the driving force as China’s economy emerges stronger from the Covid-19 scourge,” said an op-ed in the People’s Daily on December 10.

FinTech was another bright spot with the AF China FinTech index up 12.1% for the year led by companies including Wonders Information Co., a software and service provider, which surged almost 40% so far this year, and Shenzhen Sunline Tech Co, a provider of fintech services for commercial banks that rose 26%. AF China Fintech index focuses on innovative China fintech companies, including providers of crypto asset technologies such as wallets, Robo advisors and peer-to-peer lenders.

Aside from those pockets of strength, it was mostly a tough year for China’s market with the broad Shanghai Stock Exchange Composite index edging up just 3.6%.

The Hang Seng Tech index, which includes bellwethers such as Alibaba and Tencent, plunged more than 34%, hammered by a swingeing regulatory crackdown on China’s big tech companies. Chinese companies listed in the US, as tracked by the Invesco Golden Dragon ETF fund, plummeted about 45% after US regulators moved to delist Chinese companies over their non-compliance with auditing norms.

Even the red-hot electric vehicle sector disappointed with Asia Financial’s China Electrical Vehicle index up just slightly less than 3% this year.

By Richa Gandhi, Kevin Hamlin, and Frank Chen

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Richa Gandhi

Richa Gandhi is a Data Journalist with Asia Financial News Group and has a special interest in data analytics. She is a post graduate in Statistics from Pune University in India. You can reach out to her on Twitter at @RichaG18.

Kevin Hamlin

Kevin Hamlin is a financial journalist with extensive experience covering Asia. Before joining Asia Financial, Kevin worked for Bloomberg News, spending 12 years as Senior China Economy Reporter in Beijing. Prior to that, he was Asia Bureau Chief of Institutional Investor for ten years.

Frank Chen

Frank Chen is an Asia Financial correspondent who covers China business and finance with a special focus on market indexes. He has a keen interest in real estate, transport, infrastructure and consumer brands. He spends time in Shanghai and Hong Kong and speaks Mandarin, Cantonese, and English.