(Bloomberg) -- The new Chancay port in Peru hasn’t generated any revenue. It isn’t even up and running. Yet shares of a minority owner in the project have rocketed 400% since debuting less than a month ago.

That’s made Inversiones Portuarias Chancay SAA into Peru’s own version of a meme stock. But instead of Roaring Kitty’s Reddit posts, something very different is inspiring retail investors to pour money into a sleepy Latin America stock exchange.

The $1.3 billion project in which IPCH holds a 40% stake has been catapulted into the spotlight largely due to its Chinese ownership, and the criticism that ownership has generated from the US government. Its newfound prominence has given Chancay instant name recognition as a megaproject that could boost Peru’s economy, even if no one really knows what that might look like in practice.

That’s because IPCH is only a holding company, so while its investors have access to its books, they know next to nothing about the port’s financial health or projections. Peruvian stock analysts have yet to give IPCH a valuation or price target.

Dennis Pinto, the host of a YouTube channel popular among Peruvian retail investors, said audience interest in his analyses about Chancay is trouncing those about much-better-known companies like Tesla Inc.

“You can feel the euphoria,” he said.

But the questions around Chancay’s financial health have given traders cause to tap the breaks. 

“We are making webinars, reels,” said Alberto Arispe, CEO of Peruvian stock broker Kallpa Securities, “not to discourage people but to warn them that they should be careful, that there is no fundamental value to these shares, that investors are just speculating.” 

Spinoff Leads to Listing

IPCH was spun off in May by Volcan Cia Minera, a struggling Peruvian zinc miner that owned 40% of the port alongside its flagging mining units. COSCO Shipping, a giant Chinese port operator, owns the other 60%. 

Following the spinoff, IPCH was listed in Lima’s stock exchange as a separate company. Since then, common shares of the company have soared, fueled largely by rookie investors. 

Thanks to increased media coverage of the port’s magnitude as well as growing criticism of the project from Washington, interest in the “Puerto de Chancay” peaked to an all-time high in early June, according to Google Trends data. Soon, IPCH became the most-traded stock in Peru. 

Traders in Peru have compared Chancay’s white-hot performance to meme stock mania in the US, where social media personalities persuade small investors to drive up the prices of underdog stocks like GameStop or AMC Entertainment Holdings Inc. without regard to their actual performance. 

Before Chancay, Kallpa Securities already boasted more retail investors than any other local broker. Since IPCH’s debut, it has doubled its number of retail investors, who use a Robin Hood-like app called Trii, to about 30,000, according to the firm. 

A major infrastructure project vaulting to the top of the stock market on the back of social-media hype “is something that has never happened in the country’s history,” Arispe said.

But traders are wary: Common shares of IPCH have now fallen for two days in a row.

For Volcan’s part, shares in the company rallied ahead of the spinoff, as its shareholders automatically received IPCH shares. Then they crashed the day IPCH was listed separately. 

IPCH’s market cap now exceeds that of Volcan by five times.

‘That Speculative Touch’

Pinto’s audiences still can’t get enough of Chancay. They pepper him with questions about how long its share price will rise and whether to invest in its common shares or its preferential shares, which carry higher dividends and have risen much less. 

Arispe thinks that is linked to a tender offer that is coming for owners of common shares in coming months. “Some are speculating that the tender offer price will be much higher than the current market price,” he said. 

For Pinto, the business case is more straightforward: Chancay is supposed to be a big deal for Peru and continues to dominate the news.

Many say “this will be a great opportunity for Peru with a megaport of these characteristics,” Pinto said. “It gives these shares that speculative touch.” 

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