Metaverse stocks in China have attracted massive capital during the second half of 2021, and the momentum seems set to continue in the new year.
The first day after the new year vacation in the Chinese stock market saw a lot of metaverse frenzy. As of the close of market on January 4, HiFuture (002168:SZ), Silkroad Visual Technology (300556:SZ) and Yunnan Tourism (002059:SZ) reached the day trade limit of 10%, 20% and 10% respectively. In addition, players including Wondershare (300624:SZ), Jiaxun (300213:SZ) and Arcvideo (688039:SH) all ended up with double-digit percentage increases in prices.
The year 2021 had a lot to do with this new, yet undefined concept. On October 28, Facebook officially changed its name to Meta, following Roblox's IPO on Nasdaq earlier in March. Yet, the performance of metaverse securities was not impressive in the US, where this concept originated.
By comparison, 'metaverse' companies in China have been sought after by investors since Q3 2021, despite some regulatory warnings (link in Chinese). By the end of January 4, 2022, the close price of the Metaverse Concept Index in China reached CNY 1,353, up by 33.40% from CNY 1,014 on September 2, 2021.
On January 5, the fever for the concept cooled down a bit, with the index price dropping by 1.24%. Yet among the index's components, 52 stocks out of 90 have experienced a price rise, with the highest being Zqgame (300052:SZ), up by 20%.
We expect more volatility to be seen in the coming weeks.