China stocks are a mixed bag, but several are looking robust. Tesla rival BYD, e-commerce giant PDD Holdings, Trip.com, online recruitment site Kanzhun and messaging and gaming giant Tencent are five stocks to watch.
Investors should pay attention to many other Chinese stocks, including e-commerce titan Alibaba, JD.com, search giant Baidu and gaming giant NetEase. Don't forget EV makers Li Auto, Nio and XPeng.
Investors wary of buying an individual Chinese stock could choose ETFs such as KraneShares CSI China Internet ETF, iShares China Large-Cap ETF and Xtrackers Harvest CSI 300 China A-Shares ETF.
Top Chinese Stocks To Buy Or Watch
| Company | Ticker | Industry Group | Composite Rating |
|---|---|---|---|
| Trip.com | TCOM | Leisure-Travel Booking | 94 |
| BYD | BYDDF | Auto Manufacturers | n.a. |
| Kanzhun | BZ | Internet-Content | 99 |
| Tencent | TCEHY | Internet-Content | n.a. |
| PDD Holdings | PDD | Retail-Internet | 99 |
Trip.com
Trip.com is a China-based online travel site operator. It's benefitted from a travel boom after China's long Covid restrictions were lifted in late 2022.
Q1 2024 earnings jumped 86% vs. a year earlier, with revenue up 23%. Those represented slowdowns amid tougher year-over-year comparisons get tougher, and they'll continue to get tougher in 2024.
TCOM stock broke out past a cup base in late February on Q4 2023 earnings, then gapped out of a flat base, base-on-base pattern in early April. Shares hit a six-year high of 58 on May 20, but pulled back and have broken decisively below the 50-day line, back near the top of the flat base.
If Trip.com can recover the 50-day line, it would likely offer a new base.
Tesla Setting Up With High-Margin BYD In Buy Zone
BYD
The world's leading EV maker, producing fully battery electric vehicles (BEVs) and plug-in hybrids (PHEV). It's also one of the world's largest battery makers. BYD has been fighting for the BEV-only crown with Tesla and will likely regain that title this quarter.
Its EVs range from $10,000 to $150,000 across a wide range of vehicles. While the vast majority of its business is in China, overseas sales are booming, with improved logistics and upcoming plants in Thailand, Brazil and elsewhere set to kick them even higher.
In late May, BYD unveiled a new, more efficient hybrid system on May 28. The affordable Qin L and Seal 06 sedans, using the system, get 2,100 kilometers (1,305 miles) in combined range, with some real-world tests reach 2,500 kilometers.
Those sedans reportedly are seeing huge orders.
Several more models are due this year.
Q1 net income rose 10% in local currency with revenue up 4%, both slightly missing. But gross margins hit a record, even with big price cuts to spur demand.
BYD sold 331,817 EVs in May, up 5.9% vs. April's 313,245 and 38.1% vs. a year earlier. That's still below December's record 341,043. Excluding 1,329 commercial EVs, it sold a record 184,093 plug-in hybrids (PHEVs) and 146,395 fully battery electric vehicles (BEVs).
BYD stock slumped from early August to the end of January, but has since bounced back.
Shares are slightly above a short consolidation — or a handle to a consolidation going back to November — with a 29.72 buy point.
Shares are up modestly in 2024, a rare EV stock that's in positive territory. Tesla, Nio, Li Auto and XPeng are all down solidly or sharply.
Kanzhun Stock
Kaznhun provides online recruitment services via its mobile app, BOSS Zhipin, connecting companies and job seekers.
The company is growing rapidly, with earnings surging 941% and 108% in the last two quarters, along with revenue gains of 42% and 27%.
BZ stock broke out of a base-on-base formation in mid-May, hitting a 52-week high of 22.74 on May 22. Shares have retreated back below the buy point and slightly below the 50-day line. A move above the prior 21.32 buy point would be actionable, and would roughly coincide with breaking the trendline of a short, emerging consolidation.
Tencent Stock
Tencent is a massive messaging and gaming giant. Its WeChat super app is the envy of the world. The pandemic and government crackdowns on video games took their toll on profits in 2022, but Tencent earnings rebounded in 2023.
Tencent reported better-than-expected Q1 earnings on May 14. In dollar terms, EPS growth has accelerated for six straight quarters, to 51% in Q1 2024.
Tencent stock has rebounded strongly since early March, building the right side of a 17-month, 38%-deep cup-with-handle base. The handle could be viewed as its own flat base. Either way, the buy point is 50.89. Clearing the June 20 intraday high of 49.67 would offer an early entry.
Tencent is Hong Kong listed and trades over the counter in the U.S., so its U.S. stock chart shows lots of mini gap-ups and downs.
PDD Holdings
PDD Holdings is the parent of Chinese e-commerce giant Pinduoduo and international site Temu, which has been a big hit in the U.S. Pinduoduo and Temu both are lower priced and use gamification measures to drive engagement and sales.
PDD earnings and sales growth have accelerated for a few quarters, with Q4 EPS up 102% and revenue up 117%. Growth rates should slow amid tougher comparisons.
Q1 2024 earnings shot up 185% and revenue 119%. It was the third straight quarter of accelerating earnings growth and the fifth consecutive quarter of faster sales growth.
PDD stock broke out of a cup-with-handle base with a 142.32 buy point on May 16. Shares ran up to 164.69 within a few days, but then came all the way back to just above the buy point, testing its 10-week line. It's technically still actionable, though investors might want to see some signs of strength, such as retaking its 21-day line. PDD could be working on a new base just above the prior consolidation.
Please follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson.
