Are These Top Chinese Stocks On Your June 2022 Watchlist?
While some investors may be looking for recession-proof stocks amidst the turbulence in markets, Chinese tech stocks could be worth looking at. After all, this section of the stock market today remains an interesting one, to say the least. This would be the case with the recent updates regarding the pandemic lockdowns in China. As the country continues to handle fresh waves of coronavirus outbreaks, coverage of Chinese tech companies would rise. For one thing, it is important to note that this is a developing situation.
Evidently, the broader Chinese tech industry gained momentum earlier this week after mentions of China easing its lockdowns emerged. Fast forward to today, and the tone would be shifting slightly. This comes as Shanghai and Beijing are currently back on lockdown restrictions as mass testing occurs. At face value, such news would impact the overall outlook on Chinese tech stocks now. However, in the larger scheme of things, the movement of these stocks throughout the week could indicate that investors are watching them closely, nonetheless. With this knowledge in mind, some eagle-eye investors could be eager to bet on the current weakness in the space.
At the same time, some of the heavy hitters in the industry continue to press forward as well. Take Pinduoduo (NASDAQ: PDD) and JD.com (NASDAQ: JD) for example. Just last month, both companies beat quarterly revenue estimates on Wall Street in their respective financial updates. Accordingly, this would be due to Chinese consumers turning to the two companies amidst the resurgence in coronavirus cases locally. Having read this far, you might be keen on Chinese tech stock yourself. Should that be the case, here are three more to note in the stock market now.
Chinese Tech Stocks To Watch Today
- Alibaba Group Holding Ltd. (NYSE: BABA)
- Baidu Inc. (NASDAQ: BIDU)
- Bilibili Inc. (NASDAQ: BILI)
Alibaba Group Holding Ltd.
First off today we have the Chinese e-commerce giant Alibaba. Through its Alibaba.com platform, Taobao, and Tmall, the company hosts one of the largest marketplaces for business-to-business, business-to-consumer, and consumers-to-consumers in the world. It also provides the digital infrastructure and marketing reach that allows merchants, brands, retailers, and other organizations to utilize the power of new technology to engage with their users more effectively.
Alibaba’s stock is in focus following reports about its affiliate, Ant Group. In particular, the China Securities Regulatory Commission (CSRC) is said to be conducting work towards reviving the Ant Group IPO, which was halted in October 2020, following comments from Alibaba founder Jack Ma. The report was then immediately denied by the CSRC, hence causing a decline of more than 5%. However, what is evident in recent weeks is that China has been easing down on its regulatory crackdown on the tech sector. Coupled with the easing of restrictions in certain parts of China, companies like Alibaba could be worth paying attention to right now, given their current valuations.
On May 26, 2022, Alibaba released its March quarter financials. Diving in, revenue for the quarter was $32.18 billion, an increase of 9% year-over-year. This was primarily driven by its China commerce segment at 8% year-over-year to $22.14 billion. Furthermore, its local consumer services segment grew by 29% year-over-year to US$1.65 billion. The company’s cloud segment is up by 12% year-over-year to $2.99 billion. Given the strong quarter from the company, is BABA stock a buy right now?
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Baidu Inc.
Baidu is a multinational technology company focusing on internet-related services and artificial intelligence (AI). It is one of the few companies in the world to provide a complete AI stack, including AI chips, a deep learning framework, core AI capabilities, as well as an open AI platform for widespread application and use. Baidu’s cutting-edge AI capabilities have been integrated into its products and services, as well as innovative use cases.
On Wednesday, JIDU, an electric vehicle (EV) company backed by Baidu and Geely, released a concept “robocar”, which is named ROBO-01. According to the press release, JIDU’s “ultimate goal is to realize a fully driverless transportation experience.” The concept car also comes with stronger AI perception and more active service capabilities. A model which will be 90% similar to the concept car, is planned to be mass-produced in 2023.
In late May, the company reported its first-quarter financials. Diving in, total revenues for the quarter were $4.48 billion, increasing 1% from a year ago. Despite the seemingly slow growth, there were bright spots such as Baidu AI Cloud, which grew 45% year over year. According to CEO Robin Li, Baidu remains confident that its upcoming AI business will “boost the long-term growth of Baidu.” With this in mind, is BIDU stock on your watchlist?
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Bilibili Inc.
Bilibili, also known as B Site, is a video-sharing website based in Shanghai, allowing its users to submit, view, and add commentary on videos. It offers users “All the Videos You Like,” where users and content creators can discover and connect with a wide range of content covering a wide range of interests. On the whole, the company has evolved into a welcoming home for Chinese youth with a wide range of interests, as well as a frontier for promoting Chinese culture around the world.
This week, Bilibili has reported its first-quarter financial report. In brief, total net revenues reached $797.3 million, a 30% increase from a year ago. Notably, revenue from the advertising segment was $164.2 million, rising 46% year-over-year. Bilibili believes the increase was primarily attributable to further recognition of its brand name in the market and its improved advertising efficiency. Besides, average monthly active users reached a total of 293.6 million, an increase of 31% from the same period in 2021.
“Daily time spent per user increased significantly to 95 minutes in the first quarter, setting a new record high. In the meantime, we are determined to advance our commercialization capabilities, which include growing our paying users and gaining market share in the advertising sector. As we move through the year, cost control and expense reduction will be paramount to helping us weather the macro headwinds.” said Mr. Rui Chen, chairman, and chief executive officer of Bilibili. Considering the growing usage of Bilibili, would you be adding BILI stock worth adding to your portfolio?
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