Asian markets traded mixed on Friday, January 24 as investors digested a series of economic reports from China, which showed robust growth in the fourth quarter of 2024. The country’s economy expanded by 5.4%, surpassing expectations and contributing to a full-year growth rate of 5%, according to China’s National Bureau of Statistics. Key economic indicators from China were particularly encouraging. Retail sales in December jumped 3.7% year-on-year, exceeding the forecast of 3.5%. Industrial output also expanded 6.2% year-on-year, higher than the anticipated 5.4%. This positive economic data was a significant driver of market sentiment across the region and provided a strong tailwind for market performance, especially in markets closely tied to China’s economic health.
Japan’s Nikkei 225, however, ended the day down 0.31% at 38,451.46, while the Topix lost 0.33% to 2,679.42. Despite the positive economic data from China, Japanese markets were influenced by broader global factors and domestic economic concerns. South Korea’s Kospi closed slightly lower, falling 0.16% to 2,523.55, while the tech-focused Kosdaq edged up 0.06% to 724.69.
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In an interview with CNBC on January 15, David Herro, Partner and Portfolio Manager at Harris Associates, discussed the potential opportunities in international markets. Herro noted that while U.S. stocks have been the center of attention and have seen significant gains over the past decade, international equities, offer attractive investment opportunities due to their undervalued nature and growth potential.
Herro emphasized that the valuation differential between U.S. and international stocks has become quite large, creating pockets of opportunity for investors. Many international stocks are trading at attractive multiples, with earnings ratios of about 10 times, and these valuations are based on projected earnings growth of around 10%. This combination of low multiples and reasonable growth expectations makes international equities almost irresistible for investors.
Herro pointed out that the growth rates of international companies are not solely dependent on their home markets but are influenced by their global operations. For instance, many Asian companies, particularly in sectors such as technology, manufacturing, and consumer goods, have a significant presence in global markets. This global diversification can provide robust growth opportunities, even in the face of local economic challenges. He also highlighted the importance of considering the fundamentals of individual companies rather than just the macroeconomic conditions of their home countries. Many companies, despite operating in regions with varying economic conditions, have strong business models and are positioned to benefit from global trends such as digitalization, urbanization, and rising consumer spending.
As investors seek opportunities beyond the U.S., Asian markets stand out as promising destinations for long-term growth. With that in context, let’s take a look at the 10 best Asian stocks to invest in according to analysts.
A business person overlooking a graph depicting the FTSE Developed Asia Pacific All Cap Index.
Our Methodology
To compile our list of the 10 best Asian stocks to invest in according to analysts, we used Finviz and Yahoo stock screeners to identify the 30 largest Asian companies. From that list, we narrowed our choices to the 10 companies that analysts see the most upside to. We also included their stock price as of January 27 and their hedge fund sentiment, which was taken from Insider Monkey’s Hedge Fund database of 900 elite hedge funds as of Q3 of 2024. The list is sorted in ascending order of analysts’ average upside potential as of January 27.
Why do we care about what hedge funds do? 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 Invest in According to Analysts
10. Yum China Holdings, Inc. (NYSE:YUMC)
Upside Potential: 27.81%
Stock Price as of January 27: $45.24
Number of Hedge Fund Holdings: 30
Yum China Holdings, Inc. (NYSE:YUMC) is a leading restaurant operator in China and manages popular brands such as KFC, Pizza Hut, and Taco Bell. The company operates 15,000 restaurants in over 2,100 cities and towns. Yum China Holdings, Inc. (NYSE:YUMC) adapts its menu to cater to local tastes while maintaining global standards.
Yum China Holdings, Inc. (NYSE:YUMC) is implementing a dual strategy of operational efficiency and innovation to drive sustainable growth. The company has launched initiatives such as Project Fresh Eye and Project Red Eye to streamline operations and reduce costs. Project Fresh Eye focuses on simplifying and automating key processes to ease the burden on restaurant managers, allowing them to focus more on customer service. Project Red Eye, on the other hand, aims to optimize spending and procurement and is generating savings that are then reinvested in food innovation and value-for-money offers. These initiatives have led to significant improvements in restaurant margins and operating profit margins.
Furthermore, Yum China Holdings, Inc. (NYSE:YUMC) has adjusted delivery fees and introduced more entry-price offerings to attract value-conscious customers, particularly solo diners. The company has also enhanced its presence on aggregator platforms and expanded delivery coverage.
9. ASE Technology Holding Co., Ltd. (NYSE:ASX)
Upside Potential: 27.95%
Stock Price as of January 27: $9.73
Number of Hedge Fund Holdings: 12
ASE Technology Holding Co., Ltd. (NYSE:ASX) is a Taiwan-based global leader in semiconductor packaging and testing. The company provides advanced electronics manufacturing services to some of the world’s leading technology firms in the computing, telecommunications, and automotive industries. ASE Technology Holding Co., Ltd.’s (NYSE:ASX) expertise lies in offering cutting-edge solutions such as chip-on-chip packaging, system-in-package, and wafer-level packaging.
ASE Technology Holding Co., Ltd. (NYSE:ASX) is investing heavily in building new capacity and upgrading its existing facilities to meet the increasing demand for advanced chip-on-chip packaging services. The company is also strengthening its partnerships with major semiconductor companies, including foundries and fabless companies, to secure new business opportunities and expand its customer base. Additionally, ASE Technology Holding Co., Ltd. (NYSE:ASX) is developing new technologies and capabilities, such as 2.5D and 3D packaging, to enhance its competitiveness and provide more value-added services to its customers.
Another key area of focus for ASE Technology Holding Co., Ltd. (NYSE:ASX) is its test business, which is expected to play a crucial role in the company’s growth strategy. The company is investing in new test technologies and capabilities, such as wafer sort and final test, to expand its test services and increase its market share. The company is also developing its turnkey business model, which provides customers with a comprehensive range of services from design to manufacturing, to increase its revenue and profitability. Furthermore, ASE Technology Holding Co., Ltd. (NYSE:ASX) is exploring new opportunities in emerging markets, such as artificial intelligence (AI), high-performance computing (HPC), and the Internet of Things (IoT), to diversify its revenue streams and reduce its dependence on traditional markets.
8. Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (NYSE:TLK)
Upside Potential: 28.68%
Stock Price as of January 27: $17.33
Number of Hedge Fund Holdings: 7
Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (NYSE:TLK), also known as Telkom Indonesia is the largest telecommunications and network provider in Indonesia. The company offers a wide range of services, including fixed-line telephony, broadband internet, and mobile communications. Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (NYSE:TLK) plays a vital role in the country’s digital infrastructure.
Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (NYSE:TLK) is actively pursuing a comprehensive digital transformation agenda through its “5 Bold Moves” strategy, which was launched in 2022. This strategy focuses on reorganizing the company’s structure, optimizing operations, and enhancing customer experience. One of the key initiatives under this strategy is the Group Procurement initiative, which has significantly improved the efficiency of capital expenditure (CapEx) for devices and networks. This has allowed Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (NYSE:TLK) to serve a broader market segment, particularly in its Consumer business, while also reducing costs and enhancing the digital content offering. The company is also investing heavily in talent rejuvenation which has led to a more dynamic and skilled workforce.
Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (NYSE:TLK) has also been implementing a Fixed Mobile Convergence (FMC) strategy. This involves integrating its fixed and mobile services to create a seamless and integrated customer experience. The FMC initiative has already shown promising results and a significant increase in fixed broadband customers. Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (NYSE:TLK) is also exploring partnerships to manage its data center business, aiming to enhance its position in the market and leverage the expertise of its partners. Additionally, the company has established PT Telkom Infrastruktur Indonesia as an Infrastructure Managed Service entity. This initiative will enable the company to invest in additional infrastructure while maintaining a healthy financial position.
7. ICICI Bank Limited (NYSE:IBN)
Upside Potential: 29.08%
Stock Price as of January 27: $28.34
Number of Hedge Fund Holdings: 32
ICICI Bank Limited (NYSE:IBN) is one of the country’s largest private-sector banks in India. The bank provides a comprehensive suite of services, including retail and corporate banking, treasury operations, and insurance. ICICI Bank Limited (NYSE:IBN) serves a diverse customer base, ranging from individual account holders to large multinational corporations, and also has a significant international presence.
ICICI Bank Limited (NYSE:IBN) is committed to a 360-degree customer-centric approach, focusing on understanding and meeting the diverse financial needs of its customers. The bank aims to provide holistic solutions by integrating various financial services and leveraging its extensive franchise. This approach involves deepening customer relationships and enhancing delivery capabilities to offer seamless and personalized services. By aligning with the evolving needs of customers and integrating with various ecosystems, ICICI Bank Limited (NYSE:IBN) aims to capture new opportunities and expand its market share across key segments.
ICICI Bank Limited (NYSE:IBN) is also expanding its branch network and distribution channels to reach a broader customer base. The bank is also diversifying its revenue streams by growing its fee income. ICICI Bank Limited (NYSE:IBN) is also investing heavily in technology to enhance its digital offerings and operational resilience.
6. PDD Holdings Inc. (NASDAQ:PDD)
Upside Potential: 33.13%
Stock Price as of January 27: $110.88
Number of Hedge Fund Holdings: 78
PDD Holdings Inc. (NASDAQ:PDD), based in China, is the parent company of Pinduoduo, a leading e-commerce platform in China known for its innovative group-buying model. The company specializes in social commerce, enabling users to participate in group buying to access discounts. PDD Holdings Inc.’s (NASDAQ:PDD) international platform “Temu” operates in over 50 countries globally and serves price-conscious consumers.
PDD Holdings Inc. (NASDAQ:PDD) is working closely with manufacturers to explore comprehensive supply chain models, assisting them in enhancing manufacturing processes and boosting brand recognition. The company is also leveraging its digital expertise to support high-quality merchants in areas such as product development, marketing, operations, and supply chain management. By fostering strong collaborations with manufacturers and merchants, PDD Holdings Inc. (NASDAQ:PDD) aims to drive industry transformation and progress, ultimately delivering greater value to consumers through improved products and services.
Additionally, PDD Holdings Inc. (NASDAQ:PDD) has launched a $1.36 billion fee reduction initiative. This program includes service fee refunds, reduced fees for buy now and pay later services, lower security deposit requirements, and a more efficient fund withdrawal process. These measures have significantly lowered operating costs for merchants, particularly those in the agricultural and national goods sectors, enabling them to reinvest in product development and technological innovation.
5. Alibaba Group Holding Limited (NYSE:BABA)
Upside Potential: 34.40%
Stock Price as of January 27: $89.99
Number of Hedge Fund Holdings: 115
Alibaba Group Holding Limited (NYSE:BABA) is a Chinese global leader in e-commerce, cloud computing, and digital entertainment. The company’s platforms, such as Taobao and Tmall, are household names in China and serves millions of customers daily. Furthermore, the company operates Alibaba.com and Aliexpress which have a significant presence in more than 190 countries and regions. Alibaba Group Holding Limited’s (NYSE:BABA) cloud computing division, Alibaba Cloud, is one of the largest in the world, providing scalable IT solutions to businesses. The company also has interests in digital media, logistics, and fintech.
Alibaba Group Holding Limited (NYSE:BABA) is focused on enhancing the user experience across its platforms, particularly Taobao and Tmall. The company aims to drive higher purchase frequency and customer loyalty through initiatives such as the 88VIP Club loyalty program. Additionally, Alibaba Group Holding Limited (NYSE:BABA) is making significant investments in advanced technology and AI infrastructure to provide more reliable and cost-effective AI-driven solutions across various industries. The company has introduced industry-standard software service fees and expanded the use of Quanzhantui, its AI-powered marketing tool, to help merchants improve marketing efficiency.
Furthermore, Alibaba Group Holding Limited (NYSE:BABA) is working to enhance the operational efficiency of its unprofitable segments, including local services and digital media and entertainment. The company is also strengthening collaboration across its business units, particularly in global logistics, to create a more integrated and streamlined ecosystem.
4. KB Financial Group Inc. (NYSE:KB)
Upside Potential: 35.53%
Stock Price as of January 27: $61.83
Number of Hedge Fund Holdings: 16
KB Financial Group Inc. (NYSE:KB) is one of the largest financial holding companies in South Korea. The company provides a wide array of services, including retail and corporate banking, asset management, and insurance through its subsidiaries. KB Financial Group Inc. (NYSE:KB) serves millions of clients across South Korea, including individuals, SMEs, and large enterprises.
KB Financial Group Inc. (NYSE:KB) has recently announced its “value-up” plan, which focuses on sustainability and predictability of shareholder returns. The plan links shareholder returns to the company’s Common Equity Tier 1 (CET1) ratio, with excess capital above 13% being returned to shareholders through dividends and share buybacks. Furthermore, KB Financial Group Inc. (NYSE:KB) is redesigning its key performance indicators (KPIs) to align with its value-up plan and is introducing new incentives to motivate its employees to drive business growth and improve profitability.
KB Financial Group Inc. (NYSE:KB) is focusing on driving business growth through a range of initiatives. The company is prioritizing quality-driven growth, with a focus on increasing its net interest income and non-interest income through targeted lending and investment activities. KB Financial Group Inc. (NYSE:KB) is also working to improve its cost efficiency, with a goal of maintaining a cost-to-income ratio (CIR) below 40%. By achieving these goals, the company aims to drive net profit growth and increase its return on equity (ROE), providing a strong foundation for future growth and expansion.
3. KE Holdings Inc. (NYSE:BEKE)
Upside Potential: 40.92%
Stock Price as of January 27: $17.52
Number of Hedge Fund Holdings: 42
KE Holdings Inc. (NYSE:BEKE) is a Chinese real estate platform that operates Beike along with other offline services. The company facilitates property transactions, leasing, and home renovation services. KE Holdings Inc.’s (NYSE:BEKE) platform integrates real estate agents and agencies to ensure transparency and has become a trusted name in China’s real estate market.
KE Holdings Inc. (NYSE:BEKE) is focusing on expanding its business through strategic collaborations and innovations. The company has established partnerships with all top-tier developers in China and is now investing in improving its store and platform. The company is introducing new operational mechanisms to support store owners and has launched a store points incentive program that rewards store owners for long-term platform loyalty, strong performance, integrity, and innovative business practices. This initiative is designed to enhance store owners’ satisfaction and allegiance to the platform and has already shown promising results in pilot cities such as Shenzhen.
Furthermore, KE Holdings Inc. (NYSE:BEKE) is focusing on the development of its home renovation and furnishing, and home rental services businesses. The company has appointed dedicated CEOs to lead these businesses and is investing in management and other capabilities to address industry issues related to quality and commitment.
2. Honda Motor Co., Ltd. (NYSE:HMC)
Upside Potential: 45.19%
Stock Price as of January 27: $28.81
Number of Hedge Fund Holdings: 11
Honda Motor Co., Ltd. (NYSE:HMC), headquartered in Tokyo, Japan, is a global leader in automotive manufacturing. The company is known for its high-quality vehicles and innovative technologies. Honda Motor Co., Ltd. (NYSE:HMC) produces a wide range of products, including cars, motorcycles, and power equipment, and has a global presence in over 160 countries.
Honda Motor Co., Ltd. (NYSE:HMC) is shifting its focus towards electrification and expanding its electric vehicle (EV) lineup. The company plans to introduce new EV models in the US market, starting from the 2026 model year, with the aim of increasing its EV sales and reducing its reliance on traditional internal combustion engine vehicles. This move also aims to comply with the Zero-Emission Vehicle Act, a California regulation that mandates a certain percentage of new car sales must be zero-emission vehicles. Honda Motor Co., Ltd. (NYSE:HMC) is also investing in battery technology and has established a joint venture with LG Energy Solution to produce EV batteries in the US. This strategic move is expected to help the company reduce its production costs and improve the efficiency of its EV manufacturing process.
Honda Motor Co., Ltd. (NYSE:HMC) is committed to innovation and research and development (R&D) as a key driver of its growth strategy. The company is investing heavily in new technologies such as autonomous driving, artificial intelligence, and connectivity, with the aim of developing new products and services that meet the evolving needs of its customers. Furthermore, the company is also focusing on improving its operational efficiency and reducing costs. The company is implementing various measures to streamline its production processes, reduce waste, and improve the productivity of its manufacturing facilities.
1. Shinhan Financial Group Co., Ltd. (NYSE:SHG)
Upside Potential: 48.52%
Stock Price as of January 27: $35.22
Number of Hedge Fund Holdings: 8
Shinhan Financial Group Co., Ltd. (NYSE:SHG), headquartered in Seoul, South Korea, is one of the country’s largest financial conglomerates. The group offers a comprehensive range of financial services, including banking, investment, insurance, and asset management. Shinhan Bank, its flagship subsidiary, serves a diverse clientele, from individual customers to large corporations.
Shinhan Financial Group Co., Ltd. (NYSE:SHG) is focusing on qualitative growth, with an emphasis on return on equity (ROE) and return on assets (ROA). The company is targeting an ROE of 13% for 2025 and is working to optimize its asset allocation and resource allocation to achieve this goal. This includes a focus on high-growth areas such as corporate lending and digital banking, as well as efforts to improve operational efficiency and reduce costs.
Shinhan Financial Group Co., Ltd. (NYSE:SHG) is also focused on managing its risk-weighted assets (RWA) and maintaining a strong capital position. The company is targeting RWA growth of 5% for 2025 and is working to strengthen its RWA budget system and improve data alignment and integrity. This includes investments in digital transformation and data analytics, as well as efforts to enhance its risk management capabilities and improve operational efficiency.
Furthermore, Shinhan Financial Group Co., Ltd. (NYSE:SHG) has announced a comprehensive plan to enhance its enterprise value. This program aims to achieve a total shareholder return (TSR) of 50% by 2027, with a focus on increasing dividend payouts and share buybacks. The company has already made significant progress in this area, with a share buyback program of $276.37 million (KRW 400 billion) announced in the third quarter of 2024, and plans to continue this program in the future.
While we acknowledge the potential of Shinhan Financial Group Co., Ltd. (NYSE:SHG) 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 SHG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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