China is home to one of the biggest economies in the world, and after lifting its long, strict COVID regulations, it is on the rebound. Despite slow growth in the second half of last year, which caused many stocks to take a hit, some stocks have still persevered and produced excellent results.
These three Chinese stocks have managed to overcome the economic difficulties affecting industries and continue to hold some of the best buy ratings for this year. Investors should consider these stocks for their potential with growing market shares and dominant selling performances in their respective sectors.
Let’s learn about these stocks’ resilience, growth prospects and reassuring financials, which have earned them Strong Buy ratings and should put them at the top of investors’ lists this month.
PDD Holdings (PDD)
PDD Holdings (NASDAQ:PDD) owns and operates some of the largest e-commerce platforms in China and the world. Its most popular platform is Temu, which has the second-most monthly users behind Amazon (NASDAQ:AMZN).
PDD took a slight hit earlier this year, but after a Q4 earnings beat, the stock saw a considerable boost. Investors were excited by the company’s Q4 revenue of $12.52 billion and adjusted EPS of $2.40.
This stock’s Strong Buy ratings also come from the optimistic consensus estimates. The company is predicted to see a 35% increase in earnings growth this year and a significant jump in revenue on top of its rebound.
PDD has a dominant hold over the e-commerce market in China and continues to show impressive growth. Investors should buy now and watch as this stock takes off this year.
Alibaba Group (BABA)
Alibaba Group (NYSE:BABA) is another e-commerce giant based in China. Like many competitors, Alibaba has seen its fair share of trouble alongside the struggling Chinese economy. However, estimates remain confident that this stock will be among the first to return to the top with a hopeful 2024.
These estimates are fueled by Alibaba’s extensive market share and continued performance despite the hurdles standing in its way. The most recent quarterly earnings report boasts $36.669 billion in revenue, showing a 5% growth from the previous year.
While it’s not the best growth, considering the economic pressure, Alibaba has showcased some of the best perseverance out of Chinese stocks. In addition, to reignite its stock price, Alibaba shared its massive share buyback initiative involving repurchasing 524 million ordinary shares during the quarter ended March 31, 2024.
With its low price, now is a great time to buy Alibaba, believing in its proven ability to make an exciting return this year.
Li Auto (LI)
One of the significant Chinese competitors to Tesla (NASDAQ:TSLA), Li Auto (NASDAQ:LI) reported a fantastic 2023 despite economic slowdowns and high spending. In Q4, Li Auto reported a 133.8% increase in sales from Q4 2022.
The show didn’t stop there. Not only did Li Auto see an 182.2% increase in deliveries, but it also reported a free cash flow of $6.22 billion in 2023, a 1,861.8 % year-over-year increase. That’s enormous growth despite much higher operating expenses following its first fully electric EV release.
That cash flow, in line with Li Auto’s current price, makes it a criminally underrated stock, with a price-to-free cash flow ratio of around 6.5. Though the company does not expect as massive of growth this year as 2023, many other EV makers report the same.
All things considered, Li Auto is too good of a deal and has prospects too promising for investors to pass up.
On the date of publication, Joel Lim did not hold (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.
