As the blockchain frenzy fades in China, one stock continues to rally as investors bank on its connection with President Xi Jinping.
Xinhu Zhongbao Co. holds nearly half of a firm whose chairman briefed Xi and other top officials about the technology last week. The property developer has risen the 10% daily limit four straight days after ending last week near 2019’s multi-year low. This week’s jump, which has added $1.7 billion to Xinhu’s market value, has shares again up 46% for the year and near 2019’s high. Volume on Thursday was nearly triple the daily average of the past three months.
Insigma Technology Co., which owns a 2.8% stake in Qulian, fell 1.9% after jumping by the daily limit Monday through Wednesday. Other blockchain stocks also continued to cool, building on Wednesday’s pullback in parts of the sector after this week’s hot start. Xi urged faster development of the technology ahead of this week’s key policy meetings by high-ranking Chinese officials.
Chen Chun, a professor with Zhejiang University, explained the technology to Xi, according to the official Xinhua News Agency. Chen is chairman of Hangzhou Qulian Technology Co., according to a press release by his university last year, and Xinhu filings show it has a 49% stake in the blockchain solutions company.
Those bidding up Xinhu shares this week have done so despite a warning from the People’s Daily about avoiding speculative behaviour in the blockchain sector and Xinhu urging caution in trading its stock. The company added in the exchange filing late Wednesday that the investment won’t have any effect on near-term earnings as blockchain is still in its early stages.