8 Most Promising Chinese Stocks According to Hedge Funds

2. PDD Holdings Inc. (NASDAQ:PDD)

Number of Hedge Fund Holders: 86

PDD Holdings Inc. (NASDAQ:PDD) along with its peers, JD.com and Alibaba, is one of the most promising Chinese stocks. PDD Holdings is a global commerce leader with a range of business portfolios, including Pinduoduo and Temu.

The company is making major supply chain improvements and investing in supply chain efficiencies. PDD Holdings is partnering with high-quality merchants worldwide and working on customized fulfilment solutions to enhance its supply chain, considering the escalating competition in the e-commerce market. In addition, the company is prioritizing compliance as it continues to grow and penetrate in new markets globally. The company is currently operating businesses in over 79 markets worldwide. Over the past few quarters, the company has invested significant resources in building a safe shopping environment.

PDD’s revenue soared by 86% year-over-year to $13.4 billion in the second quarter of 2024, while reporting a strong operating profit of $4.5 billion. In September, PPD shares soared over 40% after China announced an economic plan to stimulate its economy.

PDD Holdings (NASDAQ:PDD) is considered one of the most undervalued stocks to buy right now. The company’s stock is trading 11.73 times its forward-year earnings, which represents a 31% discount to the sector median of 17.14. If the Chinese economy improves, which is expected to grow 5% this year, PDD’s growth could accelerate. PDD has an average price target of $168.08, indicating a potential upside of just under 18% from its current level. The stock has a consensus Buy rating from 36 analysts out of 47. As of the second quarter, 86 hedge funds held stakes in the company worth $8.10 billion.