China is the world’s No. 2 economy and home to dozens of companies that trade in the U.S. Right now, Tesla (TSLA) rival BYD (BYDDF), as well as gaming giant NetEase (NTES), e-commerce plays PDD Holdings (PDD) and XPeng (XPEV) and specialty retailer Miniso (MNSO), are 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.
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.
Investors should pay attention to many other Chinese stocks, including e-commerce titan Alibaba (BABA), messaging and gaming player Tencent (TCEHY), search giant Baidu (BIDU), as well as other China EV makers such as Li Auto (LI).
Top Chinese Stocks To Buy Or Watch
|Company||Ticker||Industry Group||Composite Rating|
|Miniso||MNSO||Retail-Discount & Variety||97|
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.
Miniso has been hugging the 21-day for a month and recently been finding support around the rising 50-day/10-week line.
MNSO stock has a base with a 29.92 buy point. A too-low handle offers a 28.28 early entry, but there could be an aggressive entry from breaking the recent downtrend.
Bottom line: MNSO stock is not a buy, but it’s close.
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 will release October sales figures near the start of November.
On Oct. 30, BYD reported strong third-quarter growth, in line with some preliminary results. Net income came in at RMB 10.41 billion ($1.41 billion), up 82% vs. a year earlier and nearly 53% vs. Q2, in local currency terms. Revenue swelled 38.5% vs. a year earlier to RMB 162.15 billion ($22.6 billion), up 38.5% vs. Q3 2022.
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, is set to begin deliveries by the end of 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 and has struggled to get and stay above the 50-day line since then. Shares have a consolidation with a 36.27 buy point.
BYD has traded tightly in recent days and weeks, trading around the 50-day and 200-day lines.
Investors could use 32.76 as an early entry, based on the Oct. 12 high.
Bottom line: BYD stock is not a buy.
XPeng is an electric vehicle maker, competing in the mainstream market. The Tesla rival sold 20,002 vehicles in October, a new record. Deliveries jumped nearly 31% vs. September’s 15,310. It was the ninth straight month of sequential gains.
The new G6 SUV, a Model Y challenger, had 8,741 deliveries, accounting for 43.7% of total October sales. It had made up more than half of September sales.
The startup reports Q3 earnings on Nov. 15, before the U.S. market opens.
XPeng stock more than tripled from 7.50 on June 1 to 23.62 on July 28, but then fell back to 13.22 intraday on Oct. 23. Shares have rebounded on strong sales and the broader market.
The Nov. 3 move above the 50-day line could be seen as a very aggressive entry. The official buy point is 23.62, but ideally XPEV stock would forge a less-extended entry.
Bottom line: XPEV stock is an aggressive 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 now has a new flat base with a 110.82 buy point. Shares roared up the right of the base in early October, flashing an early entry and nearing the buy point. Shares fell back to just below the 50-day, but shot up from that key level again, breaking out on Nov. 3.
The RS line hit a new high ahead of the stock.
Bottom line: NetEase stock is 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.
Shares pulled back to test the 50-day line amid reports that Alibaba (BABA) is getting more aggressive on prices.
Ideally, PDD stock would forge a true base.
Bottom line: PDD stock is not a buy.
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