China's Shanghai Composite index, in particular, closed up 0.9% to new seven-year highs.
Asian markets rose after the Bank of Japan kept its sizable monetary stimulus intact, as many analysts and investors had expected. The central bank also said that the world's third-biggest economy is recovering moderately.
Chinese investors also used up the entire 10.5 billion yuan, or $1.69 billion, daily investment quota for the first time, according to Reuters. This boosted China's Hang Seng index. The daily quota permits mainland traders to purchase Hong Kong stocks under the Shanghai-Hong Kong stock connection launched last November.
More than 5.6 million shares of YY had changed hands, compared to the daily average volume of 1,486,330.
Separately, TheStreet Ratings team rates YY INC -ADR as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate YY INC -ADR (YY) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- YY's very impressive revenue growth greatly exceeded the industry average of 18.7%. Since the same quarter one year prior, revenues leaped by 78.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- YY INC -ADR reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, YY INC -ADR increased its bottom line by earning $2.79 versus $1.34 in the prior year. This year, the market expects an improvement in earnings ($3.85 versus $2.79).
- YY's debt-to-equity ratio of 0.85 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 4.68 is very high and demonstrates very strong liquidity.
- 46.55% is the gross profit margin for YY INC -ADR which we consider to be strong. Regardless of YY's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, YY's net profit margin of 31.94% compares favorably to the industry average.
- YY's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 32.13%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- You can view the full analysis from the report here: YY Ratings Report