2012 is the year of the Chinese tech stocks

Since the start of the year, Chinese technology stocks have surged higher. That could be due, in part, to last year’s dismal returns, but if the last three quarters of 2012 look as good as the first, there’s lots of money to be made behind the Great Firewall.

Since the start of the year, Chinese technology stocks have surged higher. That could be due, in part, to last year’s dismal returns, but if the last three quarters of 2012 look as good as the first, there’s lots of money to be made behind the Great Firewall.

In fact, all Chinese stocks (not only tech) that trade on American exchanges jumped 14 percent in the first quarter (per Bloomberg). The article sites two reasons for the sudden interest in all things Chinese: an uptick in manufacturing and predictions that the Chinese government will lower reserve requirements.

Still, it’s Chinese tech stocks that have really dominated the show in China in 2012. Here’s a quick look at some of this year’s top performers:

1) E-Commerce China Dangdang Inc. (ADR) (NYSE:DANG). +126% in 2012.
Dangdang.com models itself after Amazon. The company got its start in books and has been adding new product categories ever since. They’re also moving rather aggressively into the e-reader market in mainland China. Dangdang shares got a big boost recently, though, when the company announced a partnership with Gome Electrical Appliances Holding Ltd.

Gome is China’s second-largest electronics dealer, and the company recently started selling its wares on Dangdang. Dangdang may start selling their own wares on Gome’s Web site as well.

2) Renren Inc. (NYSE:RENN). +63% in 2012.
A Chinese take on Facebook, Renren operates the PRC’s most popular real-name social network. The fact that the site requires members to use their real names could actually be a boon as China’s started cracking down on illegal online commenting. Sites like Weibo (a Twitter-like service where real-name requirements are fairly lax) were recently forced to shut down their services for 72 hours as they worked to scrub illegal comments from their servers (again per Reuters). Those service interruptions can only strengthen Renren’s user base.

3) Baidu.com, Inc. (ADR) (NASDAQ:BIDU). +25% in 2012.
China’s most-visited web site is also the country’s leading search engine: Baidu.com. Baidu is the fifth most-visited Web site in the world with a global reach of more than 11 percent (meaning 11 percent of everyone in the world visits the site on a daily basis, per Alexa). Baidu’s revenues for Q4 in 2011 rose 82.5 percent over the corresponding period in 2010.

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