US-listed Chinese Stocks Surge Due to Value Recovery

Because of investors' expectations of earnings reports of tech giants, the three major US stock indices rose collectively. As of the close on Monday, the Dow Jones was up 0.65%, the S&P 500 rose 0.27%, and the Nasdaq grew 0.26%, approaching its all-time high.

Driven by earnings reports and the value restoration, US-listed Chinese stocks rose collectively, as JinkoSolar soared more than 17%. iQIYI rose sharply over 9%, Xpeng climbed up more than 8%, and Lexin rose over 6%.

Before the US market opens, Chinese stocks are mixed, with JinkoSolar dipping 4.37%, iQIYI climbing 1.79%, Xpeng going up 0.82%, and Lexin rising 2.42%.

Lexin's rise is attributed to an improved dividend ratio, China's Double 11 shopping festival, accelerated earnings growth, and valuation repair. Reportedly, Lexin's online platform has officially launched a 26-day discount campaign for the Double Eleven Shopping Festival.

As for performances, Lexin had a loan scale of 51 billion yuan and an asset balance of 115 billion yuan in the second quarter of 2024. They are in the leading position in the industry. What's more, Lexin achieved not only the company's revenue growth for seven consecutive quarters but also a breakthrough in overseas business. Its lending scale in the Mexican market in the second quarter grew 61% YoY. Its revenue grew 113% YoY.

Despite the recent amazing rise in its share price, Lexin's valuations of price-earnings ratio (PE) and price-to-book ratio (PB) are lower than peers. Its attractiveness to investors is only moderately strong.

From a macroeconomic viewpoint, future credit demand is expected to gradually recover with the introduction of domestic economic stimulus policies. The recovery of expected valuation makes Chinese stocks attractive options with a high risk-return ratio.