5 Best Chinese Stocks To Buy Right Now

In this article, we discuss 5 best Chinese stocks to buy now. If you want to read our discussion on the Chinese economy, head directly to 13 Best Chinese Stocks To Buy Right Now. 

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

Number of Hedge Fund Holders: 40

Trip.com Group Limited (NASDAQ:TCOM) is a travel service provider operating globally, offering a range of services including accommodation reservation, transportation ticketing, packaged tours, and corporate travel management. The company  was founded in 1999 and is headquartered in Shanghai, China. On November 30, 2023, Trip.com Group Limited (NASDAQ:TCOM) announced that it has chosen Amazon Web Services (AWS) as its strategic cloud provider in a multiyear agreement. This collaboration will enable Trip.com to utilize AWS’s IT infrastructure and cloud technologies for global business expansion. By leveraging generative AI technologies provided by AWS, Trip.com Group Limited (NASDAQ:TCOM) aims to enhance the booking process, optimize flight pricing, and customize travel experiences at different price points. It is one of the top Chinese stocks to consider. 

According to Insider Monkey’s fourth quarter database, 40 hedge funds were long Trip.com Group Limited (NASDAQ:TCOM), compared to 42 funds in the last quarter. Kontiki Capital is the leading stakeholder of the company, with 4.44 million shares worth $160 million. 

Artisan International Value Fund made the following comment about Trip.com Group Limited (NASDAQ:TCOM) in its Q4 2022 investor letter:

“Trip.com Group Limited (NASDAQ:TCOM), a Chinese online travel agency, was the second-largest contributor to return in 2022. Trip.com is the dominant supplier of online travel reservations and is expected to benefit from China’s loosening COVID-19 restrictions on both domestic and international travel. Management of Trip.com has wisely spent the COVID-19 lockdown period reinforcing and improving the company’s market position and reducing unnecessary costs. We expect earnings to boom over the next year as travel picks up. Other investors appeared to agree, pushing the share price up 42% in 2022.”

4. Baidu, Inc. (NASDAQ:BIDU)

Number of Hedge Fund Holders: 48

Baidu, Inc. (NASDAQ:BIDU) is a Chinese company that provides internet search services and operates through Baidu Core and iQIYI segments. It is one of the best Chinese stocks to buy. On February 21, Benchmark slightly lowered its core revenue estimates for Baidu, Inc. (NASDAQ:BIDU) due to a moderately weaker-than-expected growth in non-ad revenue, particularly in areas like hardware. However, Benchmark analysts maintain a Buy rating on Baidu shares with a $210 price target. The core ad growth projection for Baidu, Inc. (NASDAQ:BIDU) remains unchanged at 6.8% year-over-year, indicating a resilient ad base benefiting from the recovery in offline verticals such as healthcare and travel. The analysts believe Baidu is on track to achieve over RMB100 million GenAI ad contribution in the fourth quarter of 2023.

According to Insider Monkey’s fourth quarter database, 48 hedge funds were bullish on Baidu, Inc. (NASDAQ:BIDU), compared to 44 funds in the prior quarter. Alkeon Capital Management is the largest stakeholder of the company, with 2.18 million shares worth $260.4 million. 

Ariel Global Fund made the following comment about Baidu, Inc. (NASDAQ:BIDU) in its Q2 2023 investor letter:

“By comparison, after a strong run last quarter, China’s internet search and online community leader, Baidu, Inc. (NASDAQ:BIDU) declined alongside a correction in Chinese stocks attributed to weak gross domestic product. We believe this price action runs counter to the company’s solid business fundamentals. Baidu delivered a top- and bottom-line earnings beat in the period, driven by a recovery in ad and cloud revenues. The company continues to invest heavily in Artificial Intelligence (AI) and is launching a generative AI, Ernie Bot, aimed at rivaling Open AI’s ChatGPT. While monetization of the new technology is largely dependent on regulatory review, we think Baidu should continue to experience margin improvement with the ongoing implementation of efficiency and profitability initiatives. While some investors remain on the sidelines due to uncertainty surrounding China’s economic growth, government regulations, and the political rhetoric towards Taiwan, we remain enthusiastic about Baidu’s longer-term opportunity for revenue growth and margin expansion across internet search, cloud, autonomous driving, artificial intelligence and online video.”

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

Number of Hedge Fund Holders: 56

JD.com, Inc. (NASDAQ:JD) is a Chinese company that provides supply chain-based technologies and services. The company, via an online marketplace, offers a wide range of products, including computers, electronics, home appliances, food, baby products, furniture, cosmetics, healthcare items, books, apparel, and more. It is one of the best Chinese stocks to invest in. 

On February 19, Bloomberg News reported that JD.com, Inc. (NASDAQ:JD) is considering a proposal to acquire Currys, a London-based electronics retailer. This development may lead to a bidding war, as a separate proposal from Elliott Investment Management was rejected by Currys. JD.com, Inc. (NASDAQ:JD) is in the early stages of evaluating a potential cash offer for Currys, causing a 33% surge in Currys’ stock on February 19. Currys has around 300 stores in the UK and more than 15,000 employees.

According to Insider Monkey’s fourth quarter database, 56 hedge funds were long JD.com, Inc. (NASDAQ:JD), compared to 53 funds in the prior quarter. Chase Coleman’s Tiger Global Management is the largest stakeholder of the company, with 8.80 million shares worth $254.3 million. 

Baron Emerging Markets Fund made the following comment about JD.com, Inc. (NASDAQ:JD) in its first quarter 2023 investor letter:

“JD.com, Inc. (NASDAQ:JD) is one of the three largest e-commerce platforms in China. Shares declined after the company reported a slowdown in fourth quarter sales and commented that deliberate culling of unprofitable SKUs would also be a drag on headline revenue growth in the first half of 2023. We believe the slowdown was driven by the peak in Chinese COVID lockdowns, which have since ended, and the elimination or reduction of unprofitable business is better for long-term margins and returns on capital. We remain investors.”

2. PDD Holdings Inc. (NASDAQ:PDD)

Number of Hedge Fund Holders: 71

PDD Holdings Inc. (NASDAQ:PDD) ranks 2nd on our list of the best Chinese stocks. It is a multinational commerce group that owns and manages a portfolio of businesses, including Pinduoduo, an e-commerce platform offering a wide range of products across different categories including agricultural produce, apparel, electronics, furniture, cosmetics, and more. 

On November 28, 2023, PDD Holdings Inc. (NASDAQ:PDD) reported a Q3 non-GAAP EPADS of $1.55 and a revenue of $9.44 billion, outperforming Wall Street estimates by $0.39 and $2.02 billion, respectively. The 94% year-over-year increase in revenue stemmed from an improvement in online marketing services and transaction services.

According to Insider Monkey’s fourth quarter database, 71 hedge funds were long PDD Holdings Inc. (NASDAQ:PDD), compared to 66 funds in the last quarter. Lei Zhang’s Hillhouse Capital Management is the largest stakeholder of the company, with 10.1 million shares worth $1.47 billion. 

GreenWood Investors stated the following regarding PDD Holdings Inc. (NASDAQ:PDD) in its fourth quarter 2023 investor letter:

“This herd-like mentality opened up two extremely high-quality investment opportunities for us in the back half of 2023. Using insights gleaned from our close proximity to e-commerce at CTT, we undertook a multi-month effort to underwrite PDD Holdings Inc. (NASDAQ:PDD). This US-listed Irish holding company owns China’s leading disruptive marketplace called PinDuoDuo. During the summer, as it became unbearable for most investors to remain publicly invested in Chinese equities, we took a position in PDD.

During our diligence phase, a local Hong Kong investor that was invested in the company noted that Western investors should just stay away as they won’t appreciate PDD’s operating culture. He highlighted how the company gives no guidance, talks to no investors, and does not optimize its business for the short term. This means that quarterly earnings often have very large deviations from consensus, driving >20%+ moves in the stock. Paired with an extremely bearish market sentiment on Chinese equities, this combination became “uninvestable for those in western markets…” (Click here to read the full text)

1. Alibaba Group Holding Limited (NYSE:BABA)

Number of Hedge Fund Holders: 116

Alibaba Group Holding Limited (NYSE:BABA) ranks 1st on our list of the best Chinese stocks. While Alibaba remains a hedge fund favorite, Macquarie downgraded the stock to Neutral on February 8, citing the company’s strategy of balancing defense and expansion, which is seen as potentially limiting earnings upside in the near term. The analysts noted that Alibaba’s management has committed to increasing investments in 2024 to defend its market leadership, leading to a more aggressive spending approach. As a result, Macquarie has reduced its adjusted EBITA estimates and lowered the target price on Alibaba’s stock by 4% to $85.40.

According to Insider Monkey’s fourth quarter database, 116 hedge funds were bullish on Alibaba Group Holding Limited (NYSE:BABA), compared to 110 funds in the last quarter. 

L1 Long Short Fund made the following comment about Alibaba Group Holding Limited (NYSE:BABA) in its second quarter 2023 investor letter:

“Alibaba Group Holding Limited (NYSE:BABA) (Long -18%) shares weakened in recent months as Chinese reopening strength faded and macro-economic datapoints began sequentially declining. Nevertheless, we believe the Chinese government will use consumption as a key lever to reinvigorate the economy post-COVID lockdowns. Alibaba remains a high-quality business with leading positions in both eCommerce and Public Cloud, and management is taking proactive steps to unlock shareholder value. It has announced plans to split into six major business groups – Cloud Intelligence, Taobao Tmall, Local Services, Global Digital, Cainiao Smart Logistics and Digital Media, and Entertainment Group. Each group will be managed independently, with a separate CEO and board, have the flexibility to raise external capital and potentially pursue separate IPOs. We believe this restructure will be a strong positive catalyst to unlock the sum-of-the-parts valuation upside in the company.”

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