U.S. equities have enjoyed a surge to new record highs this week amid burgeoning hopes that the Trump Administration will finally land a new trade deal with China. The chatter is that the United States is now willing to roll back trade tariffs to secure an agreement, something Beijing feels is a necessary precondition to them taking action on things like intellectual property protection.
With Trump feeling some political heat right now, I expect him to soften his position and start saying yes. But don’t just take my word for it: A number of large U.S.-listed Chinese equities are surging higher on the hopes that a deal is forthcoming. Here are five Chinese stocks to buy worth a look:
Baidu (NASDAQ:BIDU) shares are rising nearly another 4% on Friday, breaking free of a seven-month consolidation range to push towards its 200-day moving average. Watch for a return to the prior trading range seen at the start of the year, with price target of $175 worth a gain of roughly 40% from here.
The company will next report results on Feb. 20 after the close. Analysts are looking for earnings of $1.20 per share on revenues of $3.9 billion. The stock was recently upgraded to “buy” from analysts at CLSA.
Shares of Chinese internet retailer Alibaba (NYSE:BABA) are breaking up and over their second-half trading range to push towards prior highs set in early May. Watch for a run to the upper end of its three-year consolidation range near $210, which would be worth a gain of more than 10% from here.
The company recently reported strong results, with earnings growing 40% from the prior year despite China’s GDP growth rate posting its slowest growth since 1992. BABA is one of the top Chinese stocks to buy.
China Eastern Airlines (CEA)
Shares of China Eastern Airlines (NYSE:CEA) are emerging from an eight-month wedge pattern, with a challenge of the 2019 highs likely for a gain of roughly 50% from here. The stock was just upgraded to “buy” by analysts at UBS and Goldman Sachs, with the stock looking ready for its first major uptrend since late 2017.
The company operates nearly 700 aircraft out of its headquarters in Shanghai.
Chinese online entertainment and shopping stock to buy, iQiyi (NASDAQ:IQ), which is a subsidiary of Baidu, looks ready to break up and out of a consolidation range going back to May, setting the stage for a rally back to highs near $30 set in February.
The company will next report results on Feb. 20 after the close. Analysts are looking for a loss of $4.31 per share on revenues of $7 billion. The stock was recently upgraded by Bernstein analysts.
China Southern Airlines (ZNH)
Another Chinese airline stock, China Southern Airlines (NYSE:ZNH) looks ready to emerge from a long consolidation range that has been in play for most of the year. Airline travel is one of the most sensitive areas of the economy to the business cycle, so a turnaround in Chinese GDP growth on a trade deal would be felt most accurately here.
Traders are trying to get in front of this dynamic with Chinese stocks to buy. Shares have been upgraded in recent weeks by analysts from Goldman Sachs, JPMorgan, UBS, and Morgan Stanley.