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 Trip.com Group Limited (NASDAQ:TCOM) 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.
A customer in a travel agents office, highlighting the convenience of the companies corporate travel solutions.
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).
Trip.com Group Limited (NASDAQ:TCOM)
No. of Billionaire Investors: 10
Total Billionaire Stake: $651.3 Million
No. of Hedge Fund Holders: 51
Trip.com Group Limited (NASDAQ:TCOM) is a premier online travel agency (OTA) that is mainly engaged in the operation of a one-stop travel platform. Trip.com Group’s platform integrates a comprehensive suite of travel products and services and differentiated travel content. The company operates under two primary brands: C-Trip, which dominates the Chinese travel market, and Trip.com, its rapidly expanding international arm.
Trip.com Group Limited (NASDAQ:TCOM) posted strong results in 2024, especially in the international segment, which experienced revenue growth of 70% year-over-year. The international expansion holds much importance for Chinese companies as investors value international revenue streams at a premium compared to Chinese earnings. In 2024, the company posted a net revenue of RMB 53.3 billion, a 20% increase from a year ago.
TripGenie, an AI tool, experienced a 200% increase in traffic and a 100% surge in browsing time in 2024. This shows how users are welcoming Trip.com’s AI tool, using it to manage their trips. The company also saw outbound hotel and air ticket bookings exceed 2019 levels by 120%, outperforming the industry by 30% to 40%.
Overall TCOM ranks 6th on our list of the Chinese stocks to buy according to billionaires. While we acknowledge the potential of TCOM 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 TCOM 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.
