In this article, we will discuss the 10 best China stocks to buy now. You can skip our detailed analysis of China’s stock market, and go directly to read the 5 Best China Stocks to Buy Now.
According to a report published by Wall Street Journal, China’s key benchmark, MSCI China Index, gained 27% in 2020, exhibiting the economic recovery during the global economic clampdown. However, in September, the Chinese stock market stumbled following the collapse of Chinese real estate company Evergrande, as it faced deadlines for bond interest payments worth billions of dollars.
Due to the lack of industrial activity in China, the country’s third-quarter GDP grew by 4.9%, versus the analysts’ expectations of 5.2%, as reported by CNBC. However, in October, Chinese stocks presented a solid growth after the Golden Week holiday, with services activity returning to productive levels.
According to a report published by Bloomberg, NASDAQ Golden Dragon China Index gained 13% in October, marking its best month in 2021.
Value Stocks and China
According to a paper published on The China-U.S. Equity Valuation Gap, before 2009, the market average PE ratio of Chinese companies was reported to be 11.49 points higher than the U.S. firms and 19.62 points higher when compared with the emerging markets. Kenny Wen from Everbright Sung Hung Kai recently said that investments in Chinese stocks can reap profits for aggressive investors. Wen also thinks that the Hong Kong market is undervalued.
Some of the notable stocks in this regard are JD.com, Inc. (NASDAQ:JD), Pinduoduo Inc. (NASDAQ:PDD), Bilibili Inc. (NASDAQ:BILI), NetEase, Inc. (NASDAQ:NTES), and NIO Inc. (NYSE:NIO).
Our Methodology:
Let’s analyze our list of the best China stocks to buy now. The majority of stocks mentioned below are China-based companies, traded on the U.S. exchanges. For this list, we also took into account hedge fund sentiment, long-term growth potential, and analysts’ ratings.
Best China Stocks to Buy Now
10. Canaan Inc. (NASDAQ:CAN)
Number of Hedge Fund Holders: 11
Canaan remains one of the most popular Chinese companies among hedge funds.
At the end of Q2, 11 hedge funds tracked by Insider Monkey reported owning stakes in Canaan Inc. (NASDAQ:CAN), up from 9 in the previous quarter. The total worth of these stakes is over $48.5 million. Renaissance Technologies is the company’s leading shareholder, owning over 1.2 million shares.
The company’s revenue in the third quarter jumped 700%.
9. Weibo Corporation (NASDAQ:WB)
Number of Hedge Fund Holders: 14
Chinese social media company Weibo Corporation (NASDAQ:WB) gained 10% on November 10, as it announced strong Q3 results. The company posted an EPS of $0.90, beating the estimates by $0.05. Weibo Corporation (NASDAQ:WB) reported revenue of $607.4 million, up 30.4% from the prior-year quarter.
Recently, Citigroup highlighted the stable social media status of Weibo Corporation (NASDAQ:WB) and lifted its price target on the company to $66, with a Buy rating on the shares.
Smart money is also taking interest in Weibo Corporation (NASDAQ:WB) as of the 873 hedge funds tracked by Insider Monkey, 14 hedge funds had positions in Weibo Corporation (NASDAQ:WB) as of the end of Q2, up from 12 in the previous quarter. These stakes are valued at over $128 million.
8. Li Auto Inc. (NASDAQ:LI)
Number of Hedge Fund Holders: 20
With the rise in electric vehicles around the world, Li Auto Inc. (NASDAQ:LI) remains one of the best China stocks to buy now. Recently, Citigroup highlighted the company’s growing position in China’s new energy vehicle market. The firm lifted its price target on Li Auto Inc. (NASDAQ:LI) to $200, with a Buy rating on the shares.
At the end of Q2, 20 hedge funds tracked by Insider Monkey remained bullish on Li Auto Inc. (NASDAQ:LI), up from 18 in the previous quarter. The total value of these stakes is over $457.4 million. In Q3, Coatue Management is the company’s largest shareholder, owning roughly 2 million shares.
In October, Li Auto Inc. (NASDAQ:LI) delivered 7,649 electric cars, presenting a 107% growth from the prior-year quarter. In Q3, the company reported revenue of $780.4 million, presenting a 158.8% year-over-year growth.
7. BeiGene, Ltd. (NASDAQ:BGNE)
Number of Hedge Fund Holders: 21
BeiGene, Ltd. (NASDAQ:BGNE) is a China-based biotech company. Insider Monkey’s Q2 data shows that hedge funds are getting bullish on BeiGene, Ltd. (NASDAQ:BGNE) as 21 hedge funds tracked by Insider Monkey reported owning stakes in the company, up from 19 in the previous quarter. The total value of these stakes is roughly $6.2 billion. The company’s recent biotech advances in lymphoma treatment make it one of the best China stocks to buy now.
This October, Bernstein initiated its coverage on BeiGene, Ltd. (NASDAQ:BGNE) with an Outperform rating and a $431 price target. The firm presented a positive outlook on the company, fueled by the deployment of technological reforms.
6. Tencent Holdings Limited (OTC:TCEHY)
Number of Hedge Fund Holders: N/A
Tencent Holdings Limited (OTC:TCEHY) is a Chinese multinational technology holding company that offers internet-related services and products.
In Q3, Tencent Holdings Limited (OTC:TCEHY) reported revenue of $22 billion, up 13% from the prior-year quarter. The company also reported a 5% growth in revenues from online advertising, fueled by consistent efforts of advertiser categories, such as consumer staples and internet services. Recently, Barclays initiated its coverage on Tencent Holdings Limited (OTC:TCEHY) with an Overweight rating and an $84 price target.
Like JD.com, Inc. (NASDAQ:JD), Pinduoduo Inc. (NASDAQ:PDD), Bilibili Inc. (NASDAQ:BILI), NetEase, Inc. (NASDAQ:NTES), and NIO Inc. (NYSE:NIO), Tencent Holdings Limited (OTC:TCEHY) is also one of the most notable Chinese stocks in 2021.
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Disclosure. None. 10 Best China Stocks to Buy Now is originally published on Insider Monkey.
