In this article, we look at the 10 Best Asian Stocks To Buy Now.
The Economy of Asia
Asia the world’s largest and most populous continent has seen remarkable economic growth in recent decades. This surge in growth is fueled by various factors, including a rise in innovation and technological advancements across the region. Asia is also home to some of the most valuable and influential companies globally.
According to a report by the IMF, the Asian economies accounted for two-thirds of global growth in 2023. The region grew by 4.6% in 2023 and is forecasted to grow by 4.2% in 2024. The growth momentum is slowing in 2024, as the region faces challenges from China’s structural slowdown and a weaker-than-expected economic recovery. China’s economy rebounded in 2023 due to domestic demand and supportive measures such as monetary easing, tax reliefs, and fiscal spending. Nevertheless, growth is projected to slow to 4.6% in 2024 due to a struggling property sector and declining external demand. Looking further ahead, long-term growth is expected to decrease to 3.5% by 2028 due to weaker productivity and an aging population.
A Closer Look at Asia’s Economic Shifts and Trends
China’s economy is facing challenges due to weak consumer spending amid economic issues such as a prolonged housing slump and high youth unemployment. Chinese tech firms are increasingly focusing on artificial intelligence (AI) as a potential new revenue stream. However, intense global competition limits the effectiveness of this approach. The Chinese government needs to implement policies that restore consumer confidence and boost spending. In the second quarter of 2023, foreign investors pulled nearly $15 billion out of China, due to the slowdown in economic growth and rising geopolitical tensions. The rapid shift towards electric vehicles in China has also caught some foreign car manufacturers off guard, leading them to scale back or withdraw their investments. China’s balance of payments has turned negative. If this trend continues, it could result in the first annual net outflow of foreign investment since 1990. Despite efforts by the Chinese government to attract and retain foreign investment, such as lowering interest rates and encouraging the inflow of advanced technologies. Foreign direct investment into China during the first half of the year was the lowest since the pandemic began in 2020. Chinese companies have been increasing their outbound investments, particularly in projects such as electric vehicles and battery factories, sending a record $71 billion overseas in the second quarter of 2023, up more than 80% compared to the same period in the previous year.
Vivien Lin Thurston, a partner and portfolio manager at William Blair, noted that the earnings of major Chinese tech companies have been mixed due to the weak macroeconomic environment in China and intense competition within the e-commerce sector has led to market share losses. Thurston highlights sectors such as cosmetics, beauty, high-end manufacturing, and power equipment, which are benefiting from structural growth and overseas demand, have been more resilient to the current economic challenges. Furthermore, Thurston discusses the growing trend among Chinese companies to focus on shareholder returns through dividends and share buybacks, similar to Western companies. However, she cautions that this trend may also reflect a broader deflationary environment in China similar to Japan’s economic stagnation in the 1980s and 2000s. Hubert Chak, the CEO of SF REIT, noted that while Hong Kong’s property market has been relatively stable, the broader Chinese market continues to experience downward pressure on rental prices, particularly in logistics properties, with occupancy rates varying significantly across different regions.
India has delivered a robust economic performance, particularly in the January-March quarter of 2024, where the economy grew by 7.8% year-on-year, surpassing economists’ expectations. This growth was primarily driven by strong manufacturing output, although it marked a slight deceleration from the previous quarter’s 8.6% growth. Despite this, the growth exceeded the 6.7% forecast by economists in a Reuters poll. India’s economic growth for the entire 2023/24 fiscal year was revised up to 8.2%, making it the highest among major global economies. In terms of sectoral performance, manufacturing showed an 8.9% year-on-year increase, while agricultural output grew by 0.6%. The Reserve Bank of India’s (RBI) recent record surplus transfer is expected to provide the government with more financial flexibility, either to increase spending or reduce the fiscal deficit. The RBI is likely to maintain its benchmark repo rate at 6.50% in its upcoming meeting, given inflationary pressures. S&P Global has raised India’s sovereign rating outlook to “positive,” expecting the economy to grow at 6.8% in the current fiscal year and nearly 7% annually over the next three years.
In the second quarter of 2024, Indonesia’s GDP grew by 5.05% year-on-year, slightly exceeding forecasts. This growth rate, while strong, marks a slight decline from the 5.11% expansion in the first quarter. On a quarterly basis, GDP increased by 3.79%, a faster pace than anticipated, highlighting the resilience of Southeast Asia’s largest economy. Household spending grew by 4.93%, and public consumption increased by 1.42% last quarter compared to the significant 20% growth in the previous quarter due to pre-election spending. Investment growth accelerated to 4.43%, and exports showed signs of recovery as global trade rebounded. The steady economic performance provides the central bank with some flexibility to maintain current interest rates, focus on currency stability before potentially shifting to monetary easing later this year or in 2025.
In the second quarter of 2024, Japan reported a better-than-expected economic performance. Japan’s GDP grew by 0.8% quarter-on-quarter, surpassing analysts’ expectations of a 0.5% increase. This marks a reversal from the 0.6% decline in the first quarter. On an annualized basis, the GDP expanded by 3.1%, also beating the forecasted 2.1% growth. However, Japan’s GDP still fell on a year-on-year basis for the second consecutive quarter, declining by 0.8% after a 0.9% drop in the first quarter. Despite this, the positive quarterly growth led to a modest rise in Japan’s benchmark Nikkei 225 index and the Topix index on August 14. The Japanese yen also strengthened slightly against the U.S. dollar. Jun Saito, a senior research fellow at the Japan Center for Economic Research, described the GDP results as “very positive” and suggested that this will encourage the Bank of Japan (BOJ) to continue raising interest rates. However, the overall growth for 2024 is expected to be modest due to the earlier contraction in the first quarter. Saito warned that a narrowing interest rate differential between Japan and the U.S.—where Japan is raising rates while the U.S. is cutting them—could strengthen the yen against the dollar, negatively impacting Japan’s export value. He emphasized that the BOJ is likely to monitor market reactions closely as it continues its monetary tightening, aiming to make its monetary policy more flexible in the future.
Timothy Moe, Chief Asia Pacific Equity Strategist at Goldman Sachs, has an optimistic outlook for the APAC equity markets amid recent volatility. He believes that the recent concerns about U.S. economic growth and recession were somewhat exaggerated, and anticipates a 25 basis point rate cut by the Federal Reserve in September, as opposed to the 50 basis points previously expected by the market. Historically, when the Fed cuts rates without a recession occurring, markets tend to perform well in the subsequent months, which supports Moe’s positive view of the APAC region. He advises maintaining investments in key markets such as Japan, Korea, and Taiwan, despite recent sell-offs, due to their strong earnings growth, particularly in sectors such as semiconductors. Regarding China, Moe points out its weaker performance relative to other APAC markets but notes its diversification benefits. He stresses the need for more policy support from Chinese authorities to boost domestic demand and economic growth. Moe is strategically positive on China’s A-shares due to their potential benefit from structural market developments but prefers offshore Chinese equities in the short term. Looking ahead, he forecasts a 12% earnings growth for the APAC region in 2025, slightly below consensus expectations.
As Asia continues to navigate the complexities of economic growth, the region remains a powerhouse on the global stage. The coming years will be critical in shaping the region’s long-term economic trajectory. With that in context, let’s take a look at the 10 best Asian stocks to buy now.
Our Methodology
For this article, we used the Finviz screener to screen the largest Asian companies as of August 14. We compiled an initial list of 40 Asian companies and then narrowed our list to the 10 stocks that analysts see the most upside to. The list is sorted in ascending order of analysts’ average upside potential, as of August 14.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Best Asian Stocks To Buy Now
10. Mizuho Financial Group (NYSE:MFG)
Upside Potential: 43.58%
Average Analyst Price Estimate: $5.70
Mizuho Financial Group (NYSE:MFG) is one of Japan’s largest financial institutions. The bank provides a wide range of financial services, including banking, securities, and asset management. Mizuho Financial Group (NYSE:MFG) operates over 505 branches in Japan and has a presence in 38 countries worldwide. As of March 2024, Mizuho Financial Group (NYSE:MFG) reported total assets amounting to approximately $1.9 trillion.
For the quarter ended on June 30, Mizuho Financial Group’s (NYSE:MFG) net income increased by 16.50% to $289.30 billion. The company reported significant earnings growth and return on equity (ROE) improvement. Mizuho Financial Group’s (NYSE:MFG) EPS surged by 18% year-over-year, surpassing analyst expectations. A key driver of this growth was the increase in banking income due to favorable market conditions and the end of negative interest rates in Japan. Mizuho Financial Group’s (NYSE:MFG) ROE improved to 8% due to the company’s strategic capital reallocation. The company has monetized underperforming assets and reinvested in higher-return opportunities, which is expected to further enhance ROE in the coming quarters. Management has also set an ambitious target to achieve an ROE of over 8% by next year which indicates confidence in sustained profitability and growth.
Mizuho Financial Group (NYSE:MFG) is well-positioned to benefit from the positive shift in Japan’s interest rate, improving ROE, its strategic capital reallocation, and continued earnings growth. The company is cheaper than its industry peers, the stock is trading at 2x this year’s earnings estimate, an 83.17% discount compared to the sector median of 11.91x. Mizuho Financial Group (NYSE:MFG) stock is trading at $3.97 as of August 14. Analysts have a consensus on the stock’s Buy rating, setting a price target of $5.70 which reflects a 43.58% upside potential. The stock is trading at $14.76 as of August 14. Analysts have a consensus on the stock’s Buy rating, setting a price target of $21.83 which reflects a 47.90% upside potential.
9. Toyota Motor (NYSE:TM)
Upside Potential: 46.20%
Average Analyst Price Estimate: $252.04
Toyota Motor (NYSE:TM) is one of the world’s most recognized and successful automobile manufacturing companies in the world. Toyota Motor (NYSE:TM) manufactures cars and trucks in 28 countries and sells them in over 170 markets worldwide. In 2023, Toyota Motor (NYSE:TM) sold a total of 11.2 million vehicles worldwide under the Toyota and Lexus brands. A crucial factor in Toyota Motor’s (NYSE:TM) success is its dedication to designing, engineering, and manufacturing vehicles in the regions where they are sold.
Toyota Motor (NYSE:TM) sold just over 100,000 EVs in 2023 and plans to sell 3.5 million EVs annually across 30 different Toyota and Lexus models by 2030 to become a leader in the electric vehicle market. A key element of the company’s strategy is the development of long-range battery packs, with expectations of providing up to 500 miles of range by 2026 and 620 miles by 2027. However, the true game-changer is the company’s anticipated mass-market introduction of solid-state batteries starting in 2027. These batteries will be lighter, cheaper, more energy-dense, and faster to charge than current lithium-ion batteries which could revolutionize the EV market. Toyota’s technology roadmap suggests that the first solid-state batteries could offer a driving range of 621 miles with just a 10-minute charging time, with further advancements potentially extending the range to 750 miles. Toyota Motor’s (NYSE:TM) history of delivering adds credibility to these projections and the company has a track record of introducing innovative products that succeed in the market.
While competition from Chinese automakers is a potential challenge due to their advancements in solid-state battery technology, Toyota Motor’s (NYSE:TM) established brand, global reach, and strategic partnerships in China such as with GAC and FAW provide it with a competitive edge. Additionally, Toyota Motor’s (NYSE:TM) ability to produce vehicles locally in key markets around the world further strengthens its position.
Given that Toyota Motor’s (NYSE:TM) current stock price is significantly below its one-year peak, and the company’s history of regular dividend increases, the stock presents an attractive buying opportunity for long-term investors. Toyota Motor’s (NYSE:TM) strategic investments in EV technology, coupled with its solid financial foundation and global manufacturing capabilities, make it a compelling choice for those looking to capitalize on the future of automotive innovation. The stock is trading at $172.39, as of August 14. Analysts have a consensus on the stock’s Buy rating, setting a price target of $252.04 which represents a 46.20% upside potential.
8. ZTO Express (NYSE:ZTO)
Upside Potential: 46.51%
Average Analyst Price Estimate: $29.17
ZTO Express (NYSE:ZTO) is one of the largest express delivery companies in China and has an extensive line-haul transportation and sorting network. As of 2023, the company held a 22.9% market share in terms of parcel volume. ZTO Express (NYSE:ZTO) partners with a vast number of network companies that handle first-mile pickup and last-mile delivery which allows ZTO Express (NYSE:ZTO) to maintain a low-cost structure and expand its geographic reach across China.
One of the key strategic advantages of ZTO Express (NYSE:ZTO) is its collaboration with Alibaba, which owns approximately 12% of the company’s shares. The collaboration strengthens ZTO Express’s (NYSE:ZTO) logistics capabilities, enhances its market reach, and helps the company to capitalize on the Chinese e-commerce giant’s large customer base which can drive growth.
For the three months ended on March 31, ZTO Express (NYSE:ZTO) reported a revenue of $9.96 billion, up 10.31% compared to the same quarter in the previous year. Analysts project the company’s earnings to grow by 12.57% this year, indicating strong future profitability. Moreover, ZTO Express’s (NYSE:ZTO) PE ratio of 11.42 suggests that the company is trading at almost a 40% discount compared to the sector median of 18.98.
ZTO Express is well-positioned for significant growth due to its dominant market presence, strong financial performance, strategic partnerships, and attractive valuation metrics. As one of the largest express delivery companies in China. ZTO Express (NYSE:ZTO) is expected to grow with the rapid expansion of e-commerce in China and presents a promising opportunity for investors looking for long-term value. The stock is trading at $19.91 as of August 14. Analysts have a consensus on the stock’s Buy rating, setting a price target of $29.17 which reflects a 46.51% upside potential.
7. KE Holdings (NYSE:BEKE)
Upside Potential: 47.90%
Average Analyst Price Estimate: $21.83
KE Holdings (NYSE:BEKE) also known as Beike is headquartered in Beijing and operates Lianjia, China’s largest real estate brokerage network for housing transactions and services. The company also offers services such as home renovation, furnishing solutions, rental management, and financial services. KE Holdings (NYSE:BEKE) has 8,000 offices across China and operates a portfolio of over 500,000 rental apartments.
Over the past 5 years, the real estate market in China has experienced the most severe downturn. However, KE Holdings (NYSE:BEKE) has increased its market share in both the existing homes market and the new homes market. The key reason behind KE Holdings’ (NYSE:BEKE) success lies in its Agent Cooperation Network (ACN) and authentic property listings.
The ACN (Agent Cooperation Network) is an operating system on Beike’s platform that standardizes and organizes housing transactions by defining the roles, rights, and obligations of real estate agents. It promotes efficient cooperation and competition among agents, and streamlines the transaction process, allowing agents to specialize and gain deep knowledge in specific regions. ACN is crucial in addressing the widespread distrust and conflicts of interest in real estate transactions. Lianjia is the most trusted real estate brokerage brand in China for authentic property listings, as China’s real estate market is flooded with fake listings to solicit house hunters.
KE Holdings’ (NYSE:BEKE) home renovation and furnishing segment which accounted for only 2.8% of revenue in 2021, skyrocketed to nearly 25% to $1.52 billion in 2023, Additionally, the company’s rental property management services have also seen substantial growth, with revenues surging by 194.8% year-over-year, fueled by the expansion of its rental platform from 70,000 to over 200,000 units in 2023 and improved occupancy rates. This diversification and organic growth across multiple segments positions KE Holdings (NYSE:BEKE) as a strong player in China’s real estate market, with significant upside potential. Analysts expect the company to grow its revenue by 10.8% this year. The stock is trading at $14.76 as of August 14. Analysts have a consensus on the stock’s Buy rating, setting a price target of $21.83 which reflects a 47.90% upside potential.
6. Trip.com (NASDAQ:TCOM)
Upside Potential: 56.42%
Average Analyst Price Estimate: $65.93
Trip.com (NASDAQ:TCOM) is a Chinese online travel agency offering booking services for hotel reservations, transportation tickets, packaged tours, and corporate travel. The company is headquartered in Shanghai and has over 30,000 employees based in offices in 95 locations in China and 22 international branches.
In the financial year 2023, Trip.com’s (NASDAQ:TCOM) revenue increased by 122% to $6.3 billion compared to the previous year. The company not only recovered but also surpassed its revenue levels from before the pandemic, indicating strong growth. Trip.com’s (NASDAQ:TCOM) revenue achieved a remarkable 34% CAGR over the past three years.
Trip.com (NASDAQ:TCOM) benefits from China’s restrictive internet service regulations that pose barriers to international competitors. The company is already well-known in China and is improving its international operations, which are currently less profitable but have significant growth prospects. According to Mordor Intelligence, China’s tourism and hotel market was valued at $385.07 billion in 2024 and is expected to reach $504.22 billion by 2029, growing at a CAGR of 5.53%.
As the largest Chinese travel platform, Trip.com (NASDAQ:TCOM) benefits from extensive connections within the travel ecosystem, allowing it to acquire new outbound travelers with minimal incremental advertising costs, which supports margin growth. Trip.com’s (NASDAQ:TCOM) revenue is expected to grow by almost 5% in 2024 and is well-positioned to capitalize on the recovery of outbound travel, both through its Chinese and ASEAN region platforms.
Trip.com (NASDAQ:TCOM) is poised to maintain its dominance in China while expanding internationally. Trip.com (NASDAQ:TCOM) is cheaper than its industry peers, the stock is trading at 13.94 times this year’s earnings estimate, a 10% discount compared to the sector median of 15.53. Trip.com’s (NASDAQ:TCOM) stock is trading at $42.15 as of August 14. Analysts have a consensus on the stock’s Buy rating, setting a price target of $65.93 which reflects a 56.42% upside potential.
5. JD.com (NASDAQ:JD)
Upside Potential: 57.06%
Average Analyst Price Estimate: $41.04
JD.com (NASDAQ:JD) is a Chinese e-commerce company specializing in the retail of consumer electronics, apparel, and household products. The company also operates in logistics, marketing services, property classifieds along with other technology initiatives.
JD.com (NASDAQ:JD) is recognized for its high-quality online shopping experience. However, the company’s stock price declined by almost 7% year to date, due to a challenging economic environment, leading consumers to prioritize bargain hunting. In response, the company invested in improving its third-party merchant platform to expand its product variety and enhance price competitiveness. Which will lead to a better product mix, stronger revenue growth, and improved profit margins in the future. Ariel Investments‘ Ariel Global Fund stated the following regarding JD.com, Inc. (NASDAQ:JD) in its first quarter 2024 investor letter:
“We initiated a position in China-based technology-driven E-commerce company, JD.com, Inc. (NASDAQ:JD). The brand has long been known across the region as a superior online shopping channel due to its unique first-party model and unparalleled fulfillment service underpinned by JD Logistics. Yet, a challenging macro environment drove shares lower as shoppers began seeking bargains. In response, the company made significant investments in elevating its third-party merchant platform to enhance its variety of product offerings and price competitiveness for consumers. We believe these actions will yield an improved product mix, stronger top-line growth and margin expansion on a go-forward basis.”
JD.com (NASDAQ:JD) is cheaper than its industry peers, the stock is trading at 7.44 times this year’s earnings estimate, a 52% discount to its sector. Analysts expect earnings to grow by 9.20% this year, which presents a compelling opportunity for long-term investors. The stock is currently trading at $26.13. Analysts have given it a Buy rating, with an average price target of $41.04, implying a 57.06% upside potential.
4. POSCO Holdings (NYSE:PKX)
Upside Potential: 58.97%
Average Analyst Price Estimate: $95.65
POSCO Holdings (NYSE:PKX) is a South Korean multinational steel production company that operates in 13 countries and is one of the largest steel companies in the world. The company also deals in the construction, logistics, and energy sectors. POSCO Holdings (NYSE:PKX) also produces eco-friendly materials for rechargeable batteries. However, 82% of the total revenue of POSCO Holdings (NYSE:PKX) was derived from its core steel production business in the year 2023.
On July 12, POSCO Holdings (NYSE:PKX) announced share repurchases and the cancellation of treasury stock, which are expected to enhance shareholder returns. The company plans to buy back and cancel 5.25 million shares worth $1.47 billion in the next three years, which represent about 6% of its outstanding shares. This means that the cancellation of shares will return capital back to shareholders. The company plans to enhance its corporate value by investing in high-growth businesses and divesting assets that yield low returns to strengthen its financial performance. The company is also considering to build steel-making facilities in India and the United States. POSCO Holdings’ (NYSE:PKX) Chief Strategic Officer, Jeong Ki said in the statement:
“The company will continue to boost its corporate value by making investments in growth businesses, selling off low-yielding assets and taking aggressive steps to expand shareholder returns”
POSCO Holdings (NYSE:PKX) intends to sell non-core and low-profit assets and raise $1.92 billion, which will be invested in lithium-ion battery materials sector. According to Precedence Research, the global electric vehicle battery market size is calculated at $85.35 billion in 2024 and is expected to reach $252.02 billion by 2032, growing at a CAGR of 21.50%. POSCO Holdings (NYSE:PKX) is planning to establish new battery materials manufacturing facilities, which will increase its production capacity by 32% for the top-line products. By expanding its revenue base in the battery materials sector, POSCO Holdings (NYSE:PKX) aims to reduce its dependence on the steel industry. The battery materials business has a greater growth potential compared to steel. As of August 14, POSCO Holdings’ (NYSE:PKX) stock is trading at $60.17, and analysts project an average price target of $95.65, which represents a 58.97% upside potential.
3. Baidu (NASDAQ:BIDU)
Upside Potential: 63.00%
Average Analyst Price Estimate: $140.51
Baidu (NASDAQ:BIDU) is a Chinese multinational technology company specializing in internet search, online community, and other internet-related services. However, Baidu (NASDAQ:BIDU) is transitioning from an internet-centric business to an AI business. The company remains confident that AI will be a key driver of long-term revenue and profit growth.
Baidu (NASDAQ:BIDU) is advancing its autonomous driving technology. According to Fortune Business Insights, the autonomous driving market is projected to grow at a CAGR of 32% over the next six years, reaching nearly $39 billion by 2030. Baidu (NASDAQ:BIDU) is well-positioned to benefit from this rapidly growing market as its autonomous ride-hailing service, Apollo Go, continues to gain traction. In Q1 2024, Apollo Go provided approximately 826,000 rides, a 25% increase compared to the previous year. The service is available in over 10 cities across China and is growing rapidly, particularly in Wuhan, where it operates 24/7 and plans to roll out its sixth-generation Robotaxi, RT6. In the first quarter of 2024, fully driverless taxis in Wuhan made up 55% of all ride-hailing services.
There are currently 300 fully autonomous taxis operating in Wuhan. By the end of 2024, Baidu (NASDAQ:BIDU) plans to deploy 1,000 RT6 robotaxis on the streets of Wuhan. A key feature of the RT6 is its low unit cost, which costs the company around $27,500 to build and is half the cost of their previous generation vehicle. A ride in a robotaxi also costs half as compared to other traditional ride-hailing services. Baidu (NASDAQ:BIDU) is also actively cross-promoting ERNIE, the company’s AI chatbot service across its AI cloud, autonomous driving, and robotaxi businesses to improve user experience, boost advertiser ROI, and empower developers to build efficient applications that aim to support millions of applications developed by a wide range of enterprise and individual developers.
Baidu’s (NASDAQ:BIDU) Apollo Go Robotaxi platform could pave the way for large-scale commercial autonomous ride-hailing services. Analysts view Baidu as trading at an attractive valuation, with a forward PE ratio of 7.70, which is a 40% discount compared to the industry average of 12.91. As of August 14, the stock is priced at $86.20. Analysts have set a price target of $140.51, indicating a 63.00% upside potential from its current level.
2. H World Group (NASDAQ:HTHT)
Upside Potential: 70.20%
Average Analyst Price Estimate: $49.51
H World Group (NASDAQ:HTHT), formerly known as Huazhu Group is a Chinese company that is known as one the largest players in the global hospitality industry. H World Group (NASDAQ:HTHT) operates the business under three main models: leased and owned, franchised and manachised hotels.
In the leased and owned Model, H World Group (NASDAQ:HTHT) directly manages hotels that it either owns or rents. The Franchise Model involves independent hotel owners running their hotels under the company’s brand and standards. Whereas the Manachise model is a blend of management and franchise, where H World Group (NASDAQ:HTHT) manages hotels owned by third parties by offering them management expertise, brand recognition, and operational support while sharing the revenue, earning franchise fees and royalties.
This diversified approach enables H World Group (NASDAQ:HTHT) to maintain a robust presence in the hotel industry, with significant growth potential while managing risk and capital expenditure effectively. The combination of these models allows the company to optimize revenue streams, enhance brand recognition, and increase market penetration with relatively lower investment compared to traditional hotel ownership. As of December 31, 2023, H World Group (NASDAQ:HTHT) had 9,263 hotels in operation, including 607 leased and owned hotels, and 8,656 Manachised and franchised hotels.
The company has seen a notable rebound in both leisure and business travel, leading to higher occupancy rates. In the fourth quarter of 2023, the occupancy rate for hotels rose to 80.5%, up from 66.2% in the same quarter the previous year. This positive trend continued into 2024, with the occupancy rate reaching 77.2% in the first quarter, compared to 75.6% in the previous year.
H World Group’s (NASDAQ:HTHT) Revenue Per Available Room (RevPAR) has also experienced significant growth, recovering to 122% of pre-pandemic levels in 2023. This recovery was driven by increased Average Daily Rates (ADR) and better occupancy rates. For the first quarter of 2024, the company reported a RevPAR of RMB 216, marking a 3.1% year-over-year increase.
H World Group (NASDAQ:HTHT) is a strong investment opportunity due to its hotel management models which allow for rapid expansion with lower capital investment, recovery in both leisure and business travel, increase in occupancy rates and revenue per available room (RevPAR). The stock is trading at $29.09 as of August 14. Analysts have a consensus on the stock’s Buy rating, setting an average price target of $49.51 which represents a 70.20% upside potential.
1. Li Auto (NASDAQ:LI)
Upside Potential: 71.89%
Average Analyst Price Estimate: $33.33
Li Auto (NASDAQ:LI) is an electric vehicle manufacturer based in Beijing, China. Founded in 2015, the company has quickly established itself as a dominant player in China’s electric vehicle market, focusing on the premium segment with family-oriented SUVs.
In 2023, Li Auto (NASDAQ:LI) reported that its revenue increased by 173.5% year-over-year to $17.44 billion, whereas its net profit saw a substantial rise of 212.8% year-over-year, reaching $3.87 billion. The company delivered 376,030 cars, up 182.2% compared to the previous year.
Li Auto (NASDAQ:LI) has a 9% return on assets (ROA) which is notably high for car manufacturers. Additionally, the company has $13.70 billion in cash and has a debt of $2.12 billion. With this large reserve of cash, Li Auto (NASDAQ:LI) has the flexibility to invest in growth opportunities, such as expanding production capacity, investing in new technologies, or entering new markets, without the need to rely heavily on debt or external financing.
According to Fortune Business Insights, the global EV market was valued at $671.47 billion in 2024 and is expected to grow to $1.8 trillion by 2032 exhibiting a CAGR of 13.8%. The Asia–Pacific region dominated the electric vehicles market with a share of 51.24% in 2023 with China holding the largest share in the electric vehicle industry.
Li Auto’s (NASDAQ:LI) strong financial performance, premium product offerings, efficient capital allocation, and robust cash reserves make it well-positioned to continue its rapid growth and deliver substantial returns to investors over the long term. The stock is trading at $19.39 as of August 14. Industry analysts have a consensus on the stock’s Buy rating with an average price target of $33.33, which represents a 71.89% upside potential from its current level.
While we acknowledge the potential of Li Auto (NASDAQ:LI) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
Disclosure. None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and investors. Please subscribe to our daily free newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
