3 Chinese Stocks to Buy in May 2022

  • These Chinese stocks to buy represent the crème de la crème and are likely to be excellent long-term bets.
  • Alibaba (BABA): Strong ecommerce results in a massive growth runaway for its cloud business.
  • Nio (NIO): Top performer in the EV space which should continue growing rapidly.
  • NetEase (NTES): Leading Chinese internet company with a highly diversified income stream.
A large shopping mall in the central city is festooned with Chinese flags in celebration of the National Day after the victory against the Covid-19 epidemic.
Source: humphery / Shutterstock.com

China is the second-largest economy and the most populous country in the world. It boasts a rapidly growing urban middle-class with remarkable levels of entrepreneurship. There are always Chinese stocks to buy that will add a ton of value to your portfolio.

Chinese stocks were rallying in the past couple of weeks after Vice Premier Liu He said that the state is looking to support the economy and strive for stability. This involves the introduction of policies that should benefit markets.

The government has made signals in the past that the crackdown on various stocks would be ending, only to tighten the screws further.

The ongoing Covid 19-induced shutdowns in the country aren’t helping Chinese stocks either. However, there were reports of an ease-down in restrictions following signs of stabilization. It’s perhaps an ideal time to scoop up some promising Chinese stocks while they look to recover from multiple headwinds.

Ticker Company Current Price
BABA Alibaba Group Holding Limited $81.09
NIO Nio Inc. $13.10
NTES NetEase, Inc. $87.96

Chinese Stocks to Buy: Alibaba (BABA)

Computer and smartphone with Alibaba (BABA) logo
Source: Nopparat Khokthong / Shutterstock.com

Chinese retail giant Alibaba (NYSE:BABA) has seen a lot of carnage as far as the stock’s concerned. BABA stock shed over 62% of its value in the past 12 months amidst multiple headwinds. Consequently, it trades at just 2x forward sales, significantly lower than its five-year average. Its core business remains intact, and the dip presents a remarkable opportunity to load up on it.

The retail business reported a whopping 1.28 billion global annual active consumers in 2021. It’s grown its revenues by approximately 30%, which is slower than yesteryears but still notable incredible at its scale.

Furthermore, Alibaba continues to invest and gain success in other profitable verticals such as the cloud. Last year, its cloud business grew by an amazing 50% year-over-year basis and another 20% in its most recent quarter.

Considering how the Chinese cloud market is expected to grow by roughly 91.3% from 2020 to 2023, there’s still a massive remaining upside to Alibaba.

Nio (NIO)

NIO store sign and customer in electric car store. NIO is a Chinese EV company
Source: Robert Way / Shutterstock.com

Shares of EV giant Nio (NYSE:NIO) have taken quite a haircut in the past few months. Its recently released April delivery report was a downer, which induced strong selling pressure. Though it faces considerable short-term headwinds, it has already priced them in.

In April, Nio and its peers shut down production due to massive Covid-19 lockdowns. It delivered just 5,017 vehicles in April, a 28.6% drop from the prior-year period.

However, market experts believe that most of these effects are transitory as Nio’s supply chain companies have begun resuming operations. The company is likely to increase production gradually and expect a robust recovery by the second half of the year.

Nevertheless, Nio has been a tremendous performer growing its revenues rapidly in the three years. Gross margins are now firmly in the green as it marches towards profitability. There are plenty of risks to consider with Nio, but it’s a stock that can blow up in the coming years.

Chinese Stocks to Buy: NetEase (NTES)

netease (NTES) logo on a mobile phone screen representing earnings reports
Source: IgorGolovniov / Shutterstock.com

NetEase (NASDAQ:NTES)  is one of China’s top-performing internet businesses, primarily generating sales from gaming. It has spread its tentacles into other profitable services in recent years, including communication, content, and commerce.

It develops some of the country’s most popular mobile and PC gaming content, having over 100 games in operation. Additionally, it partners with other top game developers, including Blizzard Entertainment, to operate the world’s most successful games in China.

Its businesses have grown healthy and stable over the past several years. Its revenues and profits have been rising by double-digit percentages for multiple years. Also, it pays a handsome amount of dividends to investors.

In addition to gaming, NetEase has an AI-based learning platform, freemium music streaming and live streaming service, and a private label ecommerce brand in its arsenal. With multiple growth drivers in gaming and other related sectors, NTES stock has a bright future ahead.

On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.


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