Why Did Ping An Good Doctor and Alibaba Health Shares Surge Today?

What happened

Shares of two of the hottest stocks on the Hong Kong stock market this year saw further gains on Tuesday.

Ping An Healthcare and Technology Co Ltd (SEHK: 1833), also known as Ping An Good Doctor, and Alibaba Health Information Technology (SEHK: 241), better known as Ali Health, both surged over 5% in Hong Kong trading.

Ping An Good Doctor shares reached an intraday high of HK$92.45 and finished the day at HK$90.25, a 5.13% jump. Meanwhile, Ali Health shares climbed by 6.76% to close at HK$16.10 apiece.

This easily outperformed the benchmark Hang Seng Index, which only gained 0.56% for the day.

So what

Both Ping An Good Doctor and Ali Health have been key stock market beneficiaries of the “stay-home” investment trend in China.

Both companies are fast-growing platforms that provide critical online healthcare services. The importance of their offerings have been highlighted by Covid-19 and the enforced lockdown in many parts of China.

Ping An Good Doctor shares are up nearly 60% year-to-date while Ali Health has done even better – up 80%.

Although China is slowly returning to work, investor sentiment for these names remains strong given the rise in demand for their products during the lockdown.

The jumps today could also be attributed to the resumption of Stock Connect trading with mainland China, after the four-day Easter weekend in Hong Kong.

Now what

It will be interesting to see whether the runs continue for these two online healthcare stocks, particularly as the world’s second-largest economy returns to work.

Will demand for their platforms remain robust? As my colleague Lorretta has pointed out, Ping An Good Doctor is still loss-making. The same goes for Ali Health.

To ensure stock prices remain where they are (or even higher), the two companies are going to have to deliver market-beating results.