China stocks are rebounding again, amid signs that the economy is picking up. Tesla rival BYD, e-commerce giant PDD Holdings, New Oriental Education, video streaming site Bilibili and messaging and gaming giant Tencent are five stocks to watch.
Travel site Trip.com arguably is the best-performing Chinese stock, but it's clearly extended.
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 |
|---|---|---|---|
| New Oriental Education | EDU | Commercial Services-Education | 93 |
| BYD | BYDDF | Auto Manufacturers | n.a. |
| Bilibili | BILI | Internet-Content | 77 |
| Tencent | TCEHY | Internet-Content | n.a. |
| PDD Holdings | PDD | Retail-Internet | 99 |
New Oriental Education
New Oriental Education is a longtime leader in private education. But the company and stock struggled mightily during the pandemic as well as a government crackdown on private tutoring. But New Oriental Education has expanded into livestream e-commerce. After a huge loss in 2022, earnings returned last year and are expected to keep growing strong in 2024 and 2025.
However, Q1 2024 earnings per share came in below views.
EDU stock soared from a longtime low of 8.40 in March 2022 to a multiyear high of 98.20 on March 4 this year.
Shares have forged a new consolidation with 98.20 as the official buy point. New Oriental stock is currently back below its 50-day line. A strong move over the 50-day line would also break a downtrend. Investors could use the April 23 high of 91.04 or the May 14 high of 89.33 as early entries.
Elon Musk Touts FSD Amid Tesla EV Woes; BYD Margins Boom
BYD Stock
BYD stock is 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.
BYD's 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.
BYD launched its Sea Lion crossover on May 10, a Model Y rival, with faster charging and smart-car features. It'll launch a new hybrid pickup, with the global event taking in Mexico. Several new models are coming over the next few weeks, along with a more-advanced hybrid system.
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 stock slumped from early August to the end of January, but has since bounced back. On May 2, shares cleared a short consolidation and regained the 200-day line.
Shares have since consolidated. Investors could treat the recent action as a high handle to the short consolidation or a proper handle in a consolidation going back to last October or November. Either way, the buy point would be 29.72.
BYD has broken the downtrend of the handle, offering an early entry.
BYD is up modestly in 2024, a rare EV stock that's in positive territory, with Tesla, Nio, Li Auto, XPeng all down solidly.
Bilibili Stock
Bilibili is a livestreaming video site.
While not profitable, losses are narrowing. Revenue has been flat to down vs. a year earlier for several quarters, but is expected to rise in the low double digits over the next few quarters.
The Bilibili earnings report for Q1 is due May 23.
BILI stock broke out of a consolidation on May 2 that largely formed below the 200-day line, clearing the 13.20 buy point to its best levels since mid-November. Shares gapped up again on May 13 to a nine-month high from what could be seen as a handle to a larger consolidation going back roughly six months.
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 surged above its 200-day line in the last two weeks, building the right side of a long, deep cup base. The buy point is 53.01, though a handle would be good to see.
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 are due May 22.
But larger rival Alibaba reported mixed results on May 14, with JD.com beating on May 16.
PDD stock has broken out of cup-with-handle base with a 142.32 buy point. The handle also works if one views PDD as being in a single consolidation going back four months.
However, buying ahead of PDD earnings carries heavy risks.
Please follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson.
