We recently published a list of the 10 Best Performing Chinese Stocks So Far in 2025. In this article, we are going to take a look at where Yiren Digital Ltd. (NYSE:YRD) stands against the other Chinese stocks.
Chinese stocks have rallied in 2025 since the surprising launch of the DeepSeek AI model. The smart and lower-powered LLM AI tool has created a wave in the global AI industry, with the U.S. stock market losing over $1 trillion right after the DeepSeek launch.
Also Read: 10 Chinese Penny Stocks to Buy According to Analysts
China’s Ready to Embrace the Tech Sector
Chinese stocks have continued their momentum weeks after the launch of DeepSeek as China’s President Xi Jinping recently held meetings with Chinese tech and start-up leaders, indicating a more friendly approach to the sector. According to a Bloomberg report, the meeting included Alibaba co-founder Jack Ma and DeepSeek founder Liang Wenfeng. Ma’s presence was the highlight as investors saw it as a positive sign that Chinese officials were ready to embrace the tech sector. Ma has had a history with the Chinese government for speaking out against regulators, therefore, his presence is considered a symbolic gesture.
According to reports, Jinping has given a green signal to tech start-up leaders to remain competitive and ensured that the government would not impose unwarranted fines.
“The decision to call for such a meeting likely indicates the importance of technology innovation and the contribution of private enterprises to the development and growth of China’s economy. We view the emphasis on internet and tech providing valuation multiple support for China’s internet sector,” Citigroup analysts wrote in a research note, as per Bloomberg.
Despite the Chinese economy facing deflationary headwinds and a struggling property market, Hong Kong’s Hang Seng Index has surged over 15% year-to-date, driven by Chinese tech stocks.
Do Chinese tech stocks hold the potential to deliver a full-year rally driven by the AI boom, similar to the rally U.S. tech stocks experienced in 2024? Well, Chinese companies have the potential, and DeepSeek has proven what Chinese tech start-ups are capable of doing. However, China’s economy is in a very different place from the United States, and regulation can be difficult to predict.
A financial advisor and their client discussing the merits of wealth management services.
Our Methodology
We used the Finviz screener to shortlist 20 companies with a market capitalization of over $300 million. We ranked the 10 best-performing Chinese stocks with the highest returns year-to-date in ascending order of the YTD returns, as of February 19. We have also listed the number of hedge funds holding these stocks as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Yiren Digital Ltd. (NYSE:YRD)
No. of Hedge Fund Holders: 2
YTD Returns: 56.03%
Yiren Digital Ltd. (NYSE:YRD) is a Chinese holding company mainly engaged in operating a digital personal financial management platform, wealth, credit, and financial solutions. The company’s two major segments include Wealth and Credit. Its third segment operates an electronic commerce business that offers products such as skincare and beauty, electronics, and appliances. The platform allows users to finance purchases through loan products while offering customized non-financial products and services.
Yiren Digital Ltd. (NYSE:YRD) has successfully integrated AI into daily operations, improving efficiency and customer experience. The company has also integrated Deepseek, affirming its commitment to pioneering AI-driven innovation in financial and lifestyle services in China.
The company is making massive strides in attracting loan volumes and with the addition of AI, things will get more efficient for YRD. In Q3 2024, Yiren Digital Ltd. saw a 36% year-over-year growth in total loan volumes, reported around 13.4 billion yuan. The company’s total premiums for its insurance brokerage business saw a 27% sequential growth. YRD has significantly improved its asset quality, supported by strong risk management and borrower optimization.
For Q4 FY2024, Yiren Digital Ltd. (NYSE:YRD) is expected to generate total revenue between 1.3 billion yuan and 1.5 billion yuan, with a healthy net profit margin.
Overall, YRD ranks 9th on our list of best performing Chinese stocks to buy right now. While we acknowledge the potential of YRD as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than YRD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article is originally published at Insider Monkey.
