5 Best Asian Stocks To Buy Heading Into 2023

In this article, we discuss 5 best Asian stocks to buy heading into 2023. If you want to see more stocks in this selection, check out 12 Best Asian Stocks To Buy Heading Into 2023. 

5. Trip.com Group Limited (NASDAQ:TCOM)

Number of Hedge Fund Holders: 42

Trip.com Group Limited (NASDAQ:TCOM) is a Shanghai-based company that operates as a travel service provider for accommodation, transportation ticketing, packaged tours, corporate travel management, and other travel-related services in China and internationally. Trip.com Group Limited (NASDAQ:TCOM) is one of the best Chinese stocks to monitor. 

Barclays analyst Jiong Shao on October 28 maintained an Overweight rating on Trip.com Group Limited (NASDAQ:TCOM) but slashed the price target on the stock to $30 from $35. The analyst refreshed estimates and 12-month price targets for all the Chinese tech and internet companies under coverage heading into year-end 2022.

According to Insider Monkey’s data, 42 hedge funds were long Trip.com Group Limited (NASDAQ:TCOM) at the end of the third quarter of 2022, compared to 34 funds in the last quarter. Richard S. Pzena’s Pzena Investment Management is the largest position holder in the company, with a stake worth $278 million. 

Here is what Artisan Partners specifically said about Trip.com Group Limited (NASDAQ:TCOM) in its Q2 2022 investor letter:

“Trip.com Group Limited (NASDAQ:TCOM) is China’s leading online travel agent or OTA. Prior to the pandemic, Trip.com was a profitable business with a large competitive advantage built around its position in both inbound and outbound international travel. That advantage was based on considerable investment in support centers, a large sales force outside of China focused on hotel supply agreements, partnerships with Chinese language tour providers, and other services to support the Chinese traveler. Trip.com was a healthy and growing business—the number of Chinese outbound tourists grew to 155 million (larger than the population of Japan) in 2019 from just 57 million in 2010. As it did with so many travel entities, the pandemic upended the business, and Chinese outbound tourists in 2021 fell to just under 26 million, devastating the company’s profits and the share price, which fell from the high 30s to the low 20s.

Generally speaking, OTAs are great businesses. Effectively, these companies take a commission for booking travel for providers. In addition, an OTAs app attracts advertising revenue from airlines, hotels, and other tourist destinations. Trip.com’s appeal is enhanced by a management team thoughtful enough to operate with significant net cash on the balance sheet.”

4. Baidu, Inc. (NASDAQ:BIDU)

Number of Hedge Fund Holders: 43

Baidu, Inc. (NASDAQ:BIDU) was incorporated in 2000 and is headquartered in Beijing, China. The company offers internet search services in China, operating through Baidu Core and iQIYI segments. Baidu, Inc. (NASDAQ:BIDU) is one of the premier Chinese stocks to invest in. 

On November 22, Baidu, Inc. (NASDAQ:BIDU) reported a Q3 non-GAAP EPADS of $2.37 and a revenue of $4.57 billion, outperforming Wall Street estimates by $0.17 and $100 million, respectively. The company also announced that it had received approval to test driverless vehicles in Beijing.

Morgan Stanley analyst Gary Yu on November 23 maintained an Equal Weight rating on Baidu, Inc. (NASDAQ:BIDU) but lowered the price target on the shares to $120 from $140. Following the company’s Q3 report, the analyst kept his revenue forecasts “largely unchanged,” but somewhat lifted Baidu, Inc. (NASDAQ:BIDU)’s core non-GAAP operating profit forecasts for 2022/23 to factor in margin improvement while slashing his target given the latest sector-wide de-rating.

According to Insider Monkey’s Q3 data, 43 hedge funds were bullish on Baidu, Inc. (NASDAQ:BIDU), compared to 45 funds in the prior quarter. John W. Rogers’ Ariel Investments is the biggest stakeholder of the company, with 2.60 million shares worth $305.6 million. 

Baron Funds made the following comment about Baidu, Inc. (NASDAQ:BIDU) in its Q3 2022 investor letter:

“As part of our digitization theme, we reiterate our conviction in Baidu, Inc. (NASDAQ:BIDU) and InPost S.A. Baidu is a leading Chinese artificial intelligence company, which, in our view, is trading well below intrinsic value due to short-term economic and geopolitical uncertainties. We expect significant long-term upside given the company’s strong competitive position across several of China’s key growth industries. Baidu’s mobile ecosystem, which includes China’s dominant search engine, has over 620 million monthly active users. In our view, this ecosystem will benefit from the secular growth of China’s digital advertising industry, as well as the expansion of searchable content from established social media and e-commerce platforms resulting from recent regulatory reforms regarding data interoperability. Beyond its core search business, Baidu has invested heavily in cutting-edge technologies including cloud, autonomous driving, smart devices, and AI semiconductor chips. The company’s cloud business is one of the largest and fastest growing in China and is differentiated by its AI solutions and higher-value PaaS/SaaS offerings. Baidu has also developed leading autonomous driving technologies that it is commercializing through partnerships with top-tier Chinese auto manufacturers. We expect the company to sustain solid double-digit earnings growth over the next three to five years.”

3. Pinduoduo Inc. (NASDAQ:PDD)

Number of Hedge Fund Holders: 54

Pinduoduo Inc. (NASDAQ:PDD) is one of the top Chinese stocks to monitor. The company operates an e-commerce platform in the People’s Republic of China. On October 28, Morgan Stanley analyst Eddy Wang reiterated an Equal Weight rating and a $65 price target on Pinduoduo Inc. (NASDAQ:PDD) ahead of the company’s Q3 report in November. The analyst believes Pinduoduo Inc. (NASDAQ:PDD)’s Q3 OMS revenue growth could be the next share price catalyst, and expects Pinduoduo’s Q3 OMS revenue to achieve nearly 40% growth year-over-year. The analyst noted that this growth figure would suggest 20%-25% GMV growth.

According to Insider Monkey’s third quarter database, 54 hedge funds were long Pinduoduo Inc. (NASDAQ:PDD), compared to 41 funds in the prior quarter. Rajiv Jain’s GQG Partners is the largest stakeholder of the company, with 5.20 million shares valued at $326 million. 

Here is what Tao Value has to say about Pinduoduo Inc. (NASDAQ:PDD) in its Q4 2021 investor letter:

“On the detracting side, one of our largest detractors includes Pinduoduo (ticker: PDD). Pinduoduo (PDD) reported the second consecutive GAAP profit quarter yet missed on the revenue due to nation-wide consumption weakness & scaled back Sales & Marketing efforts. Market disliked it and the stock price plunged on the earnings. In my opinion, the accounting profits proved the original thesis of using S&M to acquire users and using great shopping experience to keep them. After realizing the first growth curve, Pinduoduo now shifted its focus & investment to agriculture. It is still very early, but the reduced size due to price drop warrants a position to watch and continue to grow with such a team with a strong culture.”

2. JD.com, Inc. (NASDAQ:JD)

Number of Hedge Fund Holders: 67

JD.com, Inc. (NASDAQ:JD) is a Beijing-based company that provides supply chain-based technologies and services in the People’s Republic of China. The company offers computers, communication, consumer electronics products, home appliances, general merchandise products, and healthcare products on its platform. JD.com, Inc. (NASDAQ:JD)’s annual active customer accounts increased by 6.5% to 588.3 million in the twelve months ended September 30, 2022.

On November 21, Citi analyst Alicia Yap raised the price target on JD.com, Inc. (NASDAQ:JD) to $90 from $85 and maintained a Buy rating on the shares following the Q3 beat. Management conveyed that the better profitability achieved through efficiency and lower costs will be sustainable, the analyst wrote in a research note. She believes JD.com, Inc. (NASDAQ:JD) remains well positioned to capture fast growth in revenue and active user count once the pandemic is over.

According to Insider Monkey’s data, 67 hedge funds were bullish on JD.com, Inc. (NASDAQ:JD) at the end of September 2022, compared to 62 funds in the prior quarter. Chase Coleman’s Tiger Global Management is the biggest stakeholder of the company, with approximately 30 million shares worth $1.50 billion. 

Here is what Argosy Investors has to say about JD.com, Inc. (NASDAQ:JD) in its Q3 2021 investor letter:

“We sold JD as a result of the furor over Chinese stocks during the quarter. We had been concerned about China’s lack of respect for investor rights for some time, and Beijing has become significantly more aggressive in asserting itself of late. In addition, the legal structure Chinese companies use to come public in the U.S., a Cayman Islands shell corporation leaves American investors with an unsure path to recovering value should these companies cease to trade on U.S. exchanges. Because of the uncertainty, we exited our position in JD completely. We still love JD’s long-term prospects, but we cannot estimate the legal/regulatory risk associated with these companies anymore. More broadly, we are freeing up cash for some other positions we already own which have declined in this market, and after additional review, remain attractive.”

1. Alibaba Group Holding Limited (NYSE:BABA)

Number of Hedge Fund Holders: 105

Alibaba Group Holding Limited (NYSE:BABA), the Chinese e-commerce and technology conglomerate, is one of the best Asian stocks to buy heading into 2023. For the September quarter of 2022, the company reported a non-GAAP EPADS of $1.82, beating market estimates by $0.17.

On November 18, Truist analyst Youssef Squali reiterated a Buy rating on Alibaba Group Holding Limited (NYSE:BABA) but lowered the price target on the shares to $120 from $125. The company’s Q2 results indicated that Alibaba Group Holding Limited (NYSE:BABA) is making solid strides in protecting margins while navigating a difficult macro environment, the analyst told investors. Near-term demand trends will potentially remain challenging, but he is encouraged by the stable high-value user count and traffic, the analyst added.

According to Insider Monkey’s Q3 data, 105 hedge funds were long Alibaba Group Holding Limited (NYSE:BABA), compared to 106 funds in the last quarter. David Blood and Al Gore’s Generation Investment Management is a prominent stakeholder of the company, with 4.50 million shares worth $360.7 million. 

Polen Capital made the following comment about Alibaba Group Holding Limited (NYSE:BABA) in its October investor letter:

“Alibaba Group Holding Limited (NYSE:BABA) is the leading e-commerce company in China. The stock was weak over the quarter as they reported a quarterly revenue decline. The company has been heavily impacted by the continued covid-19 lockdowns throughout China and the aggressive rate increases and deteriorating outlook for China’s economy have weighed heavily on the stock. The share price has also been under pressure due to the U.S. Securities and Exchange Commission’s plans to delist Chinese tech stocks in 2024 if they do not provide access to audit files.”

You can also take a look at 15 Biggest Data Mining Companies in the World and 12 Best Apparel Stocks To Buy Now.