10 Chinese Penny Stocks to Buy According to Analysts

2. Gaotu Techedu Inc. (NYSE:GOTU)

Share Price (As of December 17): $2.40

Analysts Upside: 88.70%

Gaotu Techedu Inc. (NYSE:GOTU), previously known as GSX Techedu Inc., is a holding firm primarily involved in the provision of technology-driven education services in China. The company manages its operations through subsidiaries and offers online K-12 after-school tutoring services. Gaotu also offers foreign language, professional and interest courses.

Gaotu Techedu Inc. (NYSE:GOTU) is scaling its business rapidly and the product matrix is also improving gradually. The company has invested in upgrading its educational systems to enhance organizational capabilities and improve management practices. The company has increased its market share steadily through the improvement in customer acquisition channels. Since 2023, the company has focused on expanding and diversifying its customer acquisition channels, which has produced solid results in driving acquisition systems.

Gaotu Techedu Inc.’s (NYSE:GOTU) strategic moves revolving around its core business have helped in steady progress. During Q3 2024, the company increased its revenue by 53.1% year-over-year to almost  RMB 1.2 billion while the gross balance soared by 67.2% over the year to nearly RMB 1.1 billion. A major development during the third quarter is the more balanced product offering. The company’s revenue stream is more diversified following the aggressive offline expansion. Gaotu’s non-academic tutoring and overseas exam preparation add more to the firm’s revenue, as it takes advantage of its brand and customer base to penetrate the offline market.

Gaotu Techedu Inc. (NYSE:GOTU) has a solid balance sheet, despite losing cash due to investment ramp-ups and share buybacks. The company announced share buybacks of over 120 million, however, GOTU’s liquidity position remains solid. By the end of Q3, the company had more than RMB 3.31 billion in cash and cash equivalents.