We recently published a list of the 10 Best Chinese Stocks to Buy According to Billionaires. In this article, we are going to take a look at where KE Holdings Inc. (NYSE:BEKE) stands against the other Chinese stocks held by billionaires.
The People’s Bank of China’s (PBoC) monetary easing and government stimulus have lifted the valuations of Chinese equities. A few months ago, many investors were expecting the U.S. economy to be in a better position and Chinese stocks were facing significant regulatory worries. However, the tables have turned with the Chinese economy expected to be in a better position compared to 2024.
A Positive Outlook for China
Things have taken a wild turn with the U.S. president imposing high tariffs and investors expecting an economic slowdown in the U.S. On the other hand, China’s advancement in AI and its capabilities to grow its AI infrastructure have intensified since the launch of DeepSeek’s R1 model.
“The U.S. has had a good period, and that’s coming to an end because Trump’s policies are very anti-economy. China has had a very bad period, but it looks as if it’s starting to recover,” Richard Harris, CEO of Port Shelter Investment Management, told CNBC.
Chinese government support for its technology sector has induced much optimism among investors. The Hang Seng Tech Index, which tracks some of the largest Chinese companies listed in Hong Kong, has soared over 21% year-to-date, as of March 25. At the same time, the NASDAQ 100 index, covering the U.S. tech stocks, has plunged over 3.70%. Whereas, the Shanghai Composite Index has risen over 3% compared to a drop of 1.70% in the S&P 500 index.
“Performance of the HSCEI/MSCI China in the past 17 months trended closely to the trajectory a decade ago, making us worry that we might be approaching some correction soon,” analysts at the Bank of America wrote in a report published on March 17.
Harris believes that China’s A shares have been quite depressed for some time compared to the U.S. stocks. With valuation improvements and optimism in the tech sector in China, it is a good time to explore Chinese stocks.
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Our Methodology
To compile our list of the best Chinese stocks to buy according to billionaires, we looked for the Chinese stocks widely held by billionaires. Data for the number of billionaire investors for each stock was taken from Insider Monkey’s database, updated as of Q4 2024. Finally, the 10 best Chinese stocks to buy were ranked in ascending order based on the number of billionaires holding stakes in them. We have also mentioned the number of hedge funds that held 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).
KE Holdings Inc. (NYSE:BEKE)
No. of Billionaire Investors: 11
Total Billionaire Stake: $526.60 Million
No. of Hedge Fund Holders: 47
KE Holdings Inc. (NYSE:BEKE) is focused on operating an integrated online and offline platform for housing transactions and services. KE is a pioneer in building the infrastructure and standards to reinvent how Chinese service providers and customers complete housing transactions. It is well-placed to benefit from the Chinese government’s focus on stabilizing the broader real estate market.
Policies stimulating market activity or increasing buyer confidence directly translate to higher transaction volumes for KE Holdings Inc. In 2024, the company achieved significant growth in active stores, rising by over 80% year-over-year to nearly 49,700. The company posted a record total revenue of RMB 93.5 billion for the full year, marking a growth of over 20% from a year ago. KE’s home renovation and furnishing business experienced 36% revenue growth, reaching RMB 40.8 billion, with improvements in supply chain management and reduced construction timelines. The company’s home rental services revenue soared to RMB 14.3 billion, a rise of 135% year-over-year, driven by improvements in operational efficiency and tenant experience.
KE Holdings Inc. (NYSE:BEKE) ended the year with a robust cash position, including a net operating cash inflow of RMB 9.4 billion in 2024. On March 19, Morgan Stanley analyst Andrew Tsai maintained an Overweight rating in BEKE shares, increasing the price target from $19 to $27. This price upgrade follows a valuation update to the year 2025 and a reduction in the weighted average cost of capital (WACC) from 14% to 12%. Tsai’s improved price target is based on a 23 times multiple of BEKE’s projected 2025 non-GAAP earnings per share.
Overall BEKE ranks 5th on our list of the Chinese stocks to buy according to billionaires. While we acknowledge the potential of BEKE 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 BEKE 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 30 Best Stocks To Invest In According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.