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China is the world’s No. 2 economy and home to dozens of companies that trade in the U.S. Right now, Tesla (TSLA) rivals BYD (BYDDF) and XPeng (XPEV), as well as gaming giant NetEase (NTES), e-commerce play PDD Holdings (PDD) and specialty retailer Miniso (MNSO), re China stocks worth watching or potentially buying.
After China finally eased strict Covid restrictions in late 2022, there was a lot of optimism about a Chinese economic revival. But growth has sputtered in recent months, while the long-ailing property sector is worsening. Despite Chinese officials vowing to support the economy, actual stimulus has been limited.
That’s taken a toll on Chinese stocks in recent weeks, though they are trying to find their footing.
U.S. tensions are a concern. In recent months, the White House has barred shipments of key chip technology to China, adding to tariffs and other curbs on Chinese goods. Beijing has retaliated.
Top Chinese Stocks To Buy Or Watch
|Company||Ticker||Industry Group||Composite Rating|
|Miniso||MNSO||Retail-Discount & Variety||96|
Miniso is a Chinese specialty retailer, with a treasure hunt aspect for shoppers. It boasts over 5,500 locations, including more than 2,000 overseas, with a growing number in the U.S.
Miniso earnings surged 130% in the second quarter, with revenue growth accelerating to 30%.
MNSO stock broke out of long consolidation in late July, but then moved sideways around the buy zone. On Aug. 22, shares gapped out of a multiweek shelf on the strong Q2 results. Shares ran up until mid-September, then pulled back to the 21-day line.
After hugging the 21-day for a time, Miniso fell back to the 50-day line. A strong move off the 50-day line would offer a buying opportunity.
Bottom line: MNSO stock is not a buy.
BYD is a China EV and battery giant. It’s the world’s largest EV maker, including its long-range hybrids, though it still trails Tesla in fully electric BEVs. It’s the No. 1 automaker in China and No. 10 in the world.
BYD sold 287,454 EVs in September, another record and up 43% vs. a year earlier. Of the personal vehicles, 151,193 were all-electric BEVs and 134,710 were plug-in hybrids. For the quarter, BYD sold 824,001 vehicles, including 431,603 personal BEVs.
That was just below Tesla’s 435,059. There’s a strong chance that BYD will top Tesla in BEV sales in Q4.
BYD dominates in the low-to-affordable EV market, but is expanding via the premium Denza brand. It’s also launched the “F-Brand” and super-premium Yangwang. The Yangwang U8, a $150,600 off-road vehicle, will begin deliveries in October.
The vast majority of sales remain in China, but exports are booming. Overseas sales surged to a record 25,023 in August from 18,169 in July and 10,536 in June. That should ramp up as more models are sent overseas.
BYD is building its first EV plant outside of China in Thailand, which is set to begin operation in mid-2024. The EV giant plans to build EVs in Brazil and is expected to name a location for a plant in Europe before year-end.
A European plant could help BYD avoid any future EU restrictions on made-in-China EVs.
BYD stock tumbled for much of August, rebounded, but fell back from the 50-day line. Shares have a consolidation with a 36.27 buy point. Investors could use 32.80 as an early entry above the 50-day line. But shares are trading just above the 200-day, below the 50-day.
Bottom line: BYD stock is not a buy.
The China EV startup is still losing money, and that’s likely to continue through 2024. Q2 revenue tumbled 37% vs. a year earlier, though it did improve vs. Q1, the first sequential gain in six quarters.
Revenue is improving along with deliveries.
XPeng delivered 15,310 EVs in September, its eighth straight month-to-month gain and its second-highest total ever, up 81% vs. a year earlier. The G6 crossover, a Tesla Model Y rival, had 8,132 deliveries, some 53% of the total.
Q3 deliveries hit 40,008, right in the middle of its target for 39,000-41,000.
In addition to the G6 crossover, XPeng has revamped the G9 SUV after just one year, along with a lower price. The company touted strong initial orders.
XPeng has agreed to buy the EV assets of ride-hailing giant Didi Global for not more than $744 million. The EV startup will issue shares for the deal, which also includes a strategic partnership. XPeng plans to launch a new EV brand in 2024, code-named Mona for now. The Didi deal will help with that.
The Didi deal follows a major partnership with Volkswagen (VWAGY). VW will invest in XPeng, and use the Chinese startup’s platform for its own branded EVs.
XPeng will expand into Germany, Britain, France and Israel in 2024, the company announced in early September..
XPEV stock more than tripled from the June 1 low of 7.50 to a 52-week high of 23.62 on July 28. Shares then sold off to test the 50-day line following Q2 results, but shares have rebounded back above the 21-day.
The startup jumped Aug. 28 on the Didi deal, and again on Sept. 1 with August deliveries. Shares fell back toward the 10-week line, but rebounded on Sept. 11.
XPeng stock would have a new base if it moves up the right side of its recent, deep consolidation. That would offer a 23.62 buy point, with a 19.96 early entry.
A move above the Oct. 2 high of 18.51 would offer an aggressive entry.
Bottom line: XPEV stock is not a buy.
NetEase is a leading online game provider.
Earnings growth is accelerating, but flat Q2 revenue came in a little low.
Video games accounted for 78% of Q2 revenue. NetEase offers a search engine, streaming music and other internet services.
NTES stock broke past a 94.99 flat-base buy point in June, then topped a 99.78 shelf entry on July 12. Shares peaked at 110.82 on Aug. 1,
NTES stock works now has a new flat base with a 110.82 buy point, but is falling away from the 50-day line
NTES briefly reclaimed the 50-day on Sept. 22, but closed below that level. A decisive move above the 50-day would offer an early entry, perhaps using the Sept. 22 high of 104.29 as a specific trigger. That would also coincide with a downward-sloping trendline from the top of the base.
Bottom line: NetEase stock is not a buy.
PDD Holdings is the parent of Chinese e-commerce giant Pinduoduo. It also operates the fast-growing U.S. site Temu.
On Aug. 29, PDD easily beat Q2 views, with revenue jumping 66%. Q1 earnings spiked 117% per ADS with revenue up 46%.
PDD stock gapped out of a seven-month cup-with-handle base with a 92.79 buy point on Q2 earnings. Shares then consolidated around the buy zone.
On Oct. 6, PDD surged out of a short consolidation, which investors also could treat as an alternate handle to the long cup.
Investors could use 103.60 as a legitimate buy point, but the stock is extended from the 50-day line.
Bottom line: PDD stock is a buy.
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