5 Chinese Stocks to Avoid Amid Economic Slowdown

3. Baidu, Inc. (NASDAQ:BIDU)

Number of Hedge Fund Holders: 45   

Baidu, Inc. (NASDAQ:BIDU) offers internet search services in China. On August 30, the company posted earnings for the second quarter of 2022, reporting earnings per share of $2.36, beating market estimates by $0.79. The revenue over the period was $4.4 billion, down more than 5% compared to the revenue over the same period last year and missing analyst estimates by $230 million. The firm also said that the adjusted EBITDA over the time was $1.05 billion and the adjusted EBITDA margin was 24%. The company is on the list of Chinese stocks to avoid amid economic slowdown as growth stocks take a battering amid inflation.

On September 16, UBS analyst Wei Xiong initiated coverage of Baidu, Inc. (NASDAQ:BIDU) stock with a Buy rating and a price target of HK$191.30, noting that the risk/reward profile of the shares appeared attractive for investors. 

Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Ariel Investment is a leading shareholder in Baidu, Inc. (NASDAQ:BIDU), with 2.6 million shares worth more than $393 million. 

In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Baidu, Inc. (NASDAQ:BIDU) was one of them. Here is what the fund said:

“Baidu, Inc. (NASDAQ:BIDU), a leading Chinese artificial intelligence company, contributed to performance in the second quarter due to an improving outlook for its mobile ecosystem, continued market share gains in cloud computing, solid progress in autonomous vehicle development, and improving operational efficiency. We see significant upside for Baidu, given its strong competitive position across several of China’s key growth industries.”