NEW YORK, NY / ACCESSWIRE / April 23, 2018 / Chinese concept stocks have faced a general decline with NASDAQ China Technology ETF (QQQC) remained flat so far in April. Meanwhile, a few firms still captured positive growth this month. Xunlei was one of these outperformers. Its share price increased 35.5% as of April 20, from the closing price of US$9.93 on April 2.
Xunlei recently announced several significant developments, in addition to other rumors and market news. The combination of these factors may be the main catalysts behind the stock jump.
ThunderChain and Blockchain Applications
On April 20, Xunlei announced the launch of ThunderChain, a high performance blockchain platform, which can concurrently process millions of transactions per second. another platform Ethereum only supports approximately 15 transactions per second.
As the company said in its announcement, ThunderChain utilizes Xunlei's own technology to "realize confirmation and interaction among homogeneous chains and enable multiple transactions to be executed on different chains in parallel." The consensus model that ThunderChain relies on results in low latency, making it possible to generate one block in the chain per second. At the meantime, the company launched a global competition in a partnership with a global developer community InfoQ with an objective to "develop blockchain applications and cultivate talents."
National CDN License and OneThing Cloud
Xunlei was granted a national content delivery network (CDN) operating license by China's government in April. The license for its cloud computing arm OneThing Technologies allows the company to offer CDN services to customers in sectors like live streaming, online gaming, mobile applications, online videos, and intelligent hardware. The company also affirmed its goal in the announcement published on April 4: "our goal is to become a major player in the global cloud computing industry through our sharing economy model."
According to CNBC, the company sells a device called OneThing Cloud that lets users share idle computing resources such as bandwidth and storage in exchange for a digital token called LinkToken. The contributed bandwidth and storage can be transformed into enterprise-level cloud computing services, helping reduce operating costs of internet companies in the field of CDN.
In its FY2017 financial results, Xunlei revealed a 184% year-on-year increase in other internet value-added services ("IVAS") revenues, which consists of cloud computing and services other than subscription and advertising. For the first quarter of 2018, Xunlei estimated total revenues to increase year-on-year by approximately 129.3% at the midpoint.
Thailand and Global Strategy
Hong Kong's South China Morning Post reported on April 11 about Xunlei's next possible overseas move. The newspaper said that the firm has been in discussion with government officials in Thailand, including its ministry of finance, the Thai central bank, and state-owned telecom carrier CAT. Other news reports revealed further details on the potential expansion. Xunlei was said to participate in two of the country's main digital projects that are aiming to digitize the country's infrastructural services.
Xunlei previously disclosed in the March investor call that the countries participating in China's 'One Belt One Road' initiative - which covers Thailand and other ASEAN countries - would be the highest priority. The Company has been seeking cooperation partners for its overseas efforts, as it disclosed at Las Vegas CES 2018.
SOURCE: Global News Online