ChinaNet Online Holdings Inc. (NASDAQ: CNET) hit a multiyear high on Monday after announcing news of its most recent growth strategy in digital advertising and that it won the “Best Company in Chinese Entrepreneurial SME Business Development Marketing.” This new effort is tied to Baidu and Taoabao, but we cannot help but wonder if an exponential move of this sort from such a small Chinese company should go without question. The issue to consider here is that, even after an exponential rise, the market cap is hardly $70 million.

The company won its award at the 2014 Chinese E-Commerce Industry Gateway Conference that is held in Beijing. This conference highlights e-commerce and hosts a number of top Chinese internet companies including: Soho, LEJU, eLong, Ganji and Xiaomi.

George Chu, COO of ChinaNet, addressed the way that the company approaches its marketing:

As the complexity of the internet has increased dramatically as a result of the rising mobile and cloud industry, businesses small to large all need solutions and tools to be more efficient and target-oriented in delivering digital messages to their business partners and customers. All these marketing messages need to be accurately assessed for ROI, so that marketers know what channels of communication are more effective for their businesses. This is what ChinaNet does.

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The company’s new growth strategy involves digital advertising services coupled with consumer analytics. Also the recent cooperative relationship with Baidu is represented as resulting in improved sell-through on digital advertising services.

Val Kaplin, a China-based marketing executive, said on Friday:

China outspends every other country in the Asia Pacific region on digital advertising, which in 2013 reached US $13.23 billion or approximately 11% of worldwide ad spending. Banner ads remain the most popular type of ads and constitute 30.2% of digital display ads. Keyword search ads are next at 28.5% which is still behind the US share of 47.1%. Baidu and Taoabao are the largest online advertisers in China by revenue, reporting RMB22.25 billion and RMB17.22 billion respectively, and together represent over half the entire market.

Shares soared Monday to a multiyear high of $3.98, which was up more than 100% from the previous close of $1.96. This is also following the zany gain from Friday in the wake of the Alibaba IPO. On Friday shares moved up to $2.70 marking an increase of roughly 160%. The company has 52-week trading range is $0.54 to $3.98. The other big anomaly is the trading volume of more than 37 million shares on Monday — not bad at all for a company that trades about 500,000 shares in a regular trading day.

The theme of emerging small-cap stocks with big partners making news in China is one which never ceases to amaze. It is also a trend that can come with more questions than answers.

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