Investment analysts have already upgraded at least three US-listed Chinese stocks to buy this month. The positive outlook comes as many Chinese companies report profits for the final three months of 2023 and for the full year. While many analysts are skeptical that China will be able to achieve its growth target of “around 5%” for 2024 without further stimulus, the country did report better-than-expected economic data on retail sales, industrial production and fixed investment in the first two months of economic growth. year. Here are the Chinese stocks that analysts are bullish on: Tencent Music Entertainment – Citi upgraded the stock to buy on Wednesday with a price target of $13 per share, up nearly 18% from Tuesday’s close. The company operates one of the main Chinese alternatives to Spotify. TME’s fourth-quarter results beat expectations, helped by online music revenue, Citi said in a report. “We believe TME’s stable and resilient music subscription business, with expanding music value chain and volumetric audio growth, as well as diversified multi-channel and device use cases, will drive [a] forecast for sustainable growth,” the analysts added. Kingsoft Cloud – JPMorgan on March 10 upgraded the cloud services company to overweight but cut its price target 30 cents to $4.20 per share based on lower revenue forecasts. This is still about 30% higher than expected. Kingsoft Cloud shares closed on Tuesday. JPMorgan expects the company to break even in the first quarter on earnings before interest, taxes, depreciation and amortization, and break even throughout 2024 for the first time in history. This is contrary to consensus In terms of EBITDA loss, analysts note, their bullish forecast is based on revenue shifting to higher-margin sources such as Kingsoft’s fast-growing artificial intelligence business, as well as cost savings from asset write-downs in the third quarter of 2019. Vnet Group – BofA on Tuesday raised the data center operator’s shares to buy with a price target of $2.70, up from $3.90 previously, but still more than 35% above Tuesday’s closing price. Analysts are awaiting news of a contract with a local government and demand from short-form video companies to boost VNET’s revenue in the coming years. According to the report, the company already operates data centers in more than 20 cities in China. Analysts are also finding more reasons to be gradually optimistic about other Chinese stocks. Earlier this month, on March 10, JPMorgan upgraded shares of video and gaming streaming company Bilibili to neutral from underperform, with a price target of $11, slightly below the stock’s closing price on Tuesday. Analysts expect Bilibili to achieve double-digit revenue growth targets for the year thanks to the release of new games. They also noted that the company achieved two quarters of positive operating cash flow in 2023. “With these catalysts, we think share price declines will be limited over the next 3-6 months,” the report said. Deutsche Bank analysts also initiated coverage of China’s auto sector on March 8 with five stocks with buy ratings: Great Wall Motor, BYD, Seres, Li Auto and JMC. Only Li Auto is listed in the USA – based on materials from Michael Bloom.
