China Market Movers: The Top 5 Stocks to Buy and Monitor

China is the world’s second-largest economy and home to dozens of enterprises that do business in the United States.

Right now, China stocks to watch include JD.com (JD), Pinduoduo (PDD), Canadian Solar (CSIQ), BYD (BYDDF), and Trip.com (TCOM).

Chinese stocks have had a difficult couple of years.

The Covid epidemic, as well as Beijing’s zero-Covid policy, have wreaked havoc on the economy.

Meanwhile, governmental crackdowns on technology and data-centric corporations like Alibaba (BABA), Tencent (TCEHY), and NetEase (NTES) have been major sources of friction.

Trade tensions in the United States are a source of concern, with the White House prohibiting supplies of crucial chip technology to China, as well as imposing tariffs and other restrictions on Chinese goods.

However, the tech crackdown appears to be easing, as China is relaxing stringent Covid regulations.

With the lifting of lockdowns and other extreme measures, a large wave or waves of infections are likely to occur in the coming weeks.

However, Chinese stocks are currently on the rise.

Along with price increases, the volume has increased, indicating a shift in character.

Along with China-specific optimism, there is a definite stock market rally that has been going on for several weeks.

However, the entire market uptrend is currently under severe stress.

While e-commerce dominates the current top China stocks to buy or watch, don’t overlook EV companies like Nio (NIO) and Li Auto (LI). All, like global behemoth BYD (BYDDF), is competing with Tesla (TSLA) in the world’s largest EV market.

Tencent, NetEase, and Baidu (BIDU) are the other internet behemoths to watch.

JD.com is China’s second-largest e-commerce company, after only Alibaba.

It has been profitable for several years, with an annual increase since 2018. Earnings growth has surged over the last two quarters, with Q3 earnings increasing by 80%.

However, revenue growth has slowed for six consecutive quarters, to barely 1%, due to Covid shutdowns and other disruptions.

A crackdown on large digital platforms, although hitting Alibaba and Tencent harder, dragged on JD.com stock.

JD.com stock reached a high of 108.29 in February 2021 before falling to a low of 33.17 on October 24, 2022.

Since then, shares have surged higher, breaking through the 50-day moving average in early November and returning to the 200-day moving average for the first time in nearly a year.

The stock market is presently stabilizing around that critical long-term average.

However, there is no distinct purchase point.

Bottom line: JD.com stock is NOT a good investment.

BYD is the world’s largest EV manufacturer, producing fully electric battery electric vehicles (BEV) as well as high-mileage plug-in hybrids (PHEV).

It is still behind Tesla in global BEV sales, but the gap is closing quickly.

BYD is China’s largest BEV manufacturer. As of November, China is the world’s largest automaker.

BYD sold 230,427 automobiles in November, jumping 153% from the previous year and 5.8% from October.

There were 113,915 BEVs among the 229,942 personal automobiles, a 147% increase from November 2021. The number of PHEVs increased by 164% to 116,027.

BYD expects to sell around 1.9 million new energy vehicles in 2022, with an aim of four million in 2023.

Earnings growth at BYD is accelerating as enormous, continuous investments in EV and battery plants pay off.

In local currency terms, Q3 net income increased by 350%, while adjusted profit increased by 923%. Revenue increased by 116%.

The EV behemoth is heading upward from low-cost vehicles. The BYD Seal has similar features as the Tesla Model 3, but it starts at around $8,000 less.

The 90% Denza unit recently introduced its D9 minivan, which starts at approximately $50,000. Mercedes will control 10% of the Denza unit, which will introduce an SUV in early 2023.

In early 2023, BYD will debut a super-premium brand with another, customized brand.

BYD is undergoing significant global growth, with sales lately beginning in Australia, Singapore, New Zealand, and other European countries.

It is about to begin deliveries in Thailand, followed by Japan, India, Mexico, and Malaysia in early 2023.

It is now constructing a factory in Thailand and will do likewise in Brazil.

BYD manufactures its own semiconductors and batteries, which has assisted in limiting supply chain concerns in recent years.

It provides batteries for third-party electric vehicles such as Ford Motor (F), Toyota (TM), and Tesla.

It’s also a major player in battery storage for small-scale or large-scale projects.

This company could expand more when battery production expands beyond BYD’s own EV demands.

On Nov. 25, BYD stock hit a bear-market low of 21.29, owing in part to China’s lockdowns.

However, as restrictions have been lifted, BYDDF has recovered, going above its 50-day moving average.

However, it still has a long way to go before reaching its 200-day line.

Because BYD is listed in Hong Kong and Shenzhen and trades over the counter in the United States, BYDDF is susceptible to mini-gaps.

Bottom Line: BYD Stock is NOT a Good Investment.

Canadian Solar is mostly a Chinese enterprise, although technically situated in Ontario, Canada.

It manufactures and installs solar modules and develops and constructs solar power facilities.

Earnings per share at Canadian Solar dropped in 2019, 2020, and 2021, but are predicted to more than double in 2022, with a 68% increase in 2023.

In the last two quarters, EPS increased by 494% and 167%, respectively.

On Aug. 18, CSIQ shares reached a 52-week high of 47.69, but subsequently fell to 27.38 on Oct. 24.

Shares recovered, then fell back, and are now trading between the 50-day and 200-day moving averages.

Bottom Line: CSIQ Stock is NOT a Good Investment.

After Alibaba and JD.com, Pinduoduo is China’s third largest e-commerce player.

However, it has outperformed its larger rivals in recent months, with its emphasis on low prices appealing to consumers in a difficult economy.

For the past three quarters, sales growth has increased from 5% to 50%. Pinduoduo earnings rose 256% in Q3, reported on Nov. 28. PDD stock reached a high of 212.60 in February 2021 before plummeting to 23.21 on March 15, 2022.

However, Pinduoduo stock has been trending higher in an erratic manner since then.

PDD shares exploded out of a 47%-deep base following earnings on Nov. 28, rising 31% for the week to a 52-week high. Shares continued to rise before easing slightly.

Bottom Line: PDD Stock is NOT a Good Investment.

Trip.com is a China-based internet travel company that operates under multiple brands and in numerous countries.

China is relaxing travel quarantine requirements, with signals of broader policy reforms seen as beneficial to China travel.

Trip.com has a lucrative past, yet it reported losses in the first and second quarters, with Q2 sales down 34% year on year.

On December 14, Trip.com announced a 69% increase in third-quarter profit.

Revenue increased by 16.5%, the highest increase in five quarters.

Profits are Expected to Increase in 2023.

In March, TCOM shares fell to a nine-year low of $14.29.

Trip.com’s stock has since recovered. After an unsuccessful breakthrough attempt in late August, shares fell to 19.25.

The market then recovered in a turbulent manner, with a handful of high-volume increases.

TCOM shares recovered from the 50-day moving average on Nov. 28 and continued to rise, finally breaking over resistance around 30-31 on Nov. 30.

In Conclusion.

TCOM stock is NOT a buy.

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