Chinese Equities Rally on Stimulus Package: Top Stocks to Consider
Chinese stocks have seen a nice rally over the last few days following Monday’s announcement that China’s Central Bank will implement a stimulus package to boost its slowing economy.
The economic stimulus includes reducing key interest rates, lowering reserve requirements for banks, and the injection of one trillion yuan ($142 billion) into China’s financial sector.
With China being the world’s second-largest economy in terms of GDP, the stimulus should be a positive for global markets, and here are a few stocks investors may want to consider.
E-Commerce Standout: JD.com
As the world’s most populated country, e-commerce companies in China are usually at the center of attention regarding Chinese ADRs (American Depository Receipts) on the U.S. stock exchange.
JD.com JD stands out in particular with a Zacks Rank #1 (Strong Buy). Offering a wide selection of authentic products, JD.com is the largest online direct sales company in China in terms of revenue. Furthermore, JD.com’s top line is expected to expand 3% in fiscal 2024 and FY25 with projections edging north of $160 billion.
Even better, JD.com’s EPS is now expected to soar 27% this year and is projected to rise another 4% in FY25 to $4.15 per share. Attributing to the strong buy rating for JD is that earnings estimate revisions are nicely up over the last 60 days.
Notably, Chinese e-commerce giant Alibaba BABA and multinational commerce group PDD Holdings PDD are also worthy of consideration with a Zacks Rank #3 (Hold).
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Top Internet Services Stocks: TCEHY & BIDU
Sporting a Zacks Rank #2 (Buy), Tencent Holdings TCEHY runs an internet services portal that provides value-added internet, mobile, telecom, and online advertising services.
In addition to this, Tencent is one of the world’s largest video game publishers with EPS projected to climb 32% in FY24 to $3.05 compared to $2.31 a share in 2023. Plus, another 14% EPS growth is expected next year with FY24 and FY25 EPS estimates up 4% and 2% in the last 60 days respectively.
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Known as the Google of China, Baidu BIDU is the leading search engine provider in the People’s Republic and lands a Zacks Rank #3 (Hold).
Like Google’s parent company Alphabet GOOGL, Baidu has an extensive reach in regards to online marketing services and other tech endeavors including cloud computing, autonomous driving, and smart consumer electronics.
Other Stocks to Consider
Operating multi-use integrated resorts, Las Vegas Sands LVS could also see a boost from China’s economic stimulus. Outside of operations in its namesake city, Las Vegas Sands operates several casinos in Macao, China.
Seen as the gambling hub of Asia, Macao has been critical to Las Vegas Sands’ probability with double-digit EPS growth forecasted in FY24 and FY25. LVS has a Zacks Rank #3 (Hold) after rising over +14% so far this month.
Freeport-McMoRan FCX is another American company that has seen its stock spike on favorable economic news in China. FCX was up over +7% today as Freeport-McMoRan has copper treatment and refining agreements with several Chinese companies. The mining company has appealing top and bottom line expansion and also lands a Zacks Rank #3 (Hold) at the moment.
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Baidu, Inc. (BIDU) : Free Stock Analysis Report
Tencent Holding Ltd. (TCEHY) : Free Stock Analysis Report
JD.com, Inc. (JD) : Free Stock Analysis Report
Alibaba Group Holding Limited (BABA) : Free Stock Analysis Report
PDD Holdings Inc. Sponsored ADR (PDD) : Free Stock Analysis Report
Freeport-McMoRan Inc. (FCX) : Free Stock Analysis Report
Las Vegas Sands Corp. (LVS) : Free Stock Analysis Report
iShares China Large-Cap ETF (FXI): ETF Research Reports
Alphabet Inc. (GOOGL) : Free Stock Analysis Report