Are These The Chinese Tech Stocks With The Highest Potential?
The past couple of years have not been kind to Chinese tech stocks in the stock market. From regulatory crackdowns in their home country to fears of delisting from U.S. stock exchanges, it is no surprise why many investors have been looking elsewhere. But things could be turning around. In fact, there has been a slight rebound among Chinese tech stocks lately. Notably, Chinese Vice-Premier Liu He said last month that the government would take measures to boost the economy and introduce market-friendly policies.
Elsewhere, recent reports suggest that Beijing regulators seem to be working to give the U.S. authorities complete access to audits of Chinese companies. Now, this access could be as soon as the middle of this year. This would allow U.S.-listed Chinese stocks to continue trading publicly in the U.S., easing fears of delisting among investors. Should this come into fruition, it could be a massive boost for Chinese stocks. After all, some investors may argue that most Chinese tech stocks’ downward spiral over the years is slightly overblown.
As a result, the likes of Bilibili (NASDAQ: BILI) and Alibaba (NYSE: BABA) appear to be climbing back up. BILI stock and BABA stock rose by more than 37% and 19% respectively within the past month. That said, questions will remain if this is sustainable long-term. One thing’s for sure, investors are now showing more confidence in these stocks. So, here are some of the top Chinese tech stocks in the stock market today that may be of your interest.
Chinese Tech Stocks To Buy [Or Avoid] Today
Pinduoduo is a tech giant that specializes in the e-commerce sector. The Company’s platform provides value-for-money merchandise and interactive shopping options. The platform is built to resemble a virtual bazaar of a broad spectrum of products. Consumers could find various products that range from apparel and electronic appliances to food and beverage goods. PDD stock has been on an impressive run lately. The stock has risen more than 25% over the past month.
In March, Pinduoduo announced its fourth-quarter financial results and business updates. As of the end of 2021, the company has connected more than 16 million farmers to its 868.7 million buyers in China. On a sense of scale, there were a total of 61 billion orders placed on the platform in 2021. This represents a 59% increase year-over-year, driven by surging agricultural orders. On top of that, it also stepped up its efforts of agricultural modernization through various initiatives. This is to help farmers expand market access while motivating the younger generation to take up agriculture.
On the financial end, the company has also been firing on all cylinders. For starters, gross merchandise value for the fiscal year 2021 was $383 billion, representing an increase of 46% year-over-year. Meanwhile, revenue for the year was $14.7 billion, an increase of 58% from the previous year. Moving forward, the company is making a strategic shift from sales and marketing toward research and development. Pinduoduo believes that long-term investments are necessary for its growth in agriculture. Considering these factors, could PDD stock be a buy right now?
Another top Chinese stock to note would be JD.com. Similar to Pinduoduo, the company operates an e-commerce platform. JD’s two segments are Retail and New Businesses. The JD Retail segment consists of online retail, online marketplace, and marketing services in China. Meanwhile, the New Businesses segment is responsible for logistic services provided to third parties, technology initiatives, and asset management services to logistics property investors.
Last month, the company’s JD Logistics announced that it has entered into a series of agreements for the proposed acquisition of Deppon Logistics. For the uninitiated, Deppon is an integrated, customer-centered logistics company that provides a wide range of solutions in China. This includes less-than-truckload transportation, delivery services, full truck-load transport, and warehousing management. Safe to say, this investment appears to be one for the future amid the growing role of e-commerce in retail.
Fundamentally, the company continues to perform steadily. During its fourth quarter, the Chinese Internet giant reported total revenue of $43.3 billion, an increase of 26% year-over-year. Meanwhile, its adjusted earnings per share were $0.35, exceeding analysts’ expectations of $0.24. Overall, it appears that sentiment around the company is improving, and for good reasons. With that in mind, should you consider investing in JD stock?
Last but not least, we will be looking at the online entertainment services company, iQIYI. Essentially, the company provides genuine video content. This includes movies, television dramas, variety shows, and animes. Besides that, it also has an entertainment-based social media platform, iQIYI Paopao. The platform caters to fans that wish to follow and interact with celebrities and the entertainment community. Impressively, IQ stock has been on a steady upward momentum, rising more than 30% over the past month.
Last week, the company announced the launch of its iQIYI channel on Roku Streaming Players and Roku TV models. Users in the U.S. and Canada will have access to iQIYI content by simply logging on to the iQIYI channel on their Roku devices. Additionally, the company will provide free viewing of some episodes of selected dramas. This would allow users to have a glimpse of the content that piques their interest.
Furthermore, iQIYI also started the month of April by announcing the upgrade of its collaboration model for online film distribution. The new models are Cloud Cinema Premiere and Subscription Premiere. On one hand, the Cloud Cinema Premiere will generate revenues from both the Premium on Demand and Subscription Video on Demand models of streaming. On the other hand, the Subscription Premiere model will share its revenue with film producers. However, it is determined by users’ viewing time alone, rather than according to distinct fee category classifications. To say the least, the upgraded models will help initiate a Direct-to-Consumer model in China’s film and TV industry. All things considered, do you believe IQ stock will have more room to run?