Wall Street is excited about these Chinese stocks | Private Equity Weekly
So far this month, investment analysts have upgraded at least three U.S.-listed Chinese stocks to buy ratings. The positive view comes as many Chinese companies are reporting earnings for the final three months and full year of 2023. While many analysts have expressed doubts that China can achieve its 2024 growth target of “around 5%” without further stimulus, China did report economic data on retail sales, industrial production and fixed asset investment in the first two months of the year. The data was better than expected. Year. Here are the Chinese stocks that analysts have turned bullish on: Tencent Music Entertainment – Citi upgraded the stock to a buy rating on Wednesday, with a price target of $13 per share, nearly 18% higher than Tuesday’s closing price. The company operates one of the main Chinese alternatives to Spotify. Citi reported that TME’s fourth-quarter performance exceeded expectations thanks to “outstanding performance in online music” revenue. The analysts added: “We believe TME’s stable/resilient subscription music business, expanding music value chain capabilities, growth in long-form audio, and diverse use case scenarios across multiple channels/devices will support (a) continued growth Prospects.” Kingsoft Cloud – J.P. Morgan upgraded the cloud services company to “overweight” on March 10 but cut its price target by 30 cents to $4.20 per share based on lower revenue forecasts. That’s still about 30% higher than Kingsoft Cloud’s closing price on Tuesday. JPMorgan expects the company to break even on advance interest, tax, depreciation and amortization in the first quarter and for all of 2024 for the first time ever. Analysts noted that this was contrary to the consensus view of EBITDA losses. Their optimism stems from a shift in revenue to higher-margin sources, such as Kingsoft’s fast-growing artificial intelligence business, as well as lower costs from asset write-offs in the third quarter. Vnet Group — Bank of America raised shares of the data center operator to buy on Tuesday, with a price target of $2.70, down from the previous price of $3.90 but still more than 35% above Tuesday’s closing price. Analysts expect news of local government contracts and demand from short video companies to boost VNET’s revenue in the coming years. According to reports, the company already operates data centers in more than 20 cities in China. Analysts are also finding more reasons to become increasingly optimistic about other Chinese stocks. Earlier this month, on March 10, JPMorgan Chase raised the stock price of video streaming and gaming company Bilibili from underweight to neutral, with a target price of $11, slightly lower than Tuesday’s closing price. Analysts predict that Bilibili can achieve double-digit revenue growth this year with the release of new games. They also noted that the company delivered two quarters of positive operating cash flow in 2023. “Under the influence of these catalysts, we believe there is limited room for stock price decline in the next 3-6 months,” the report said. Deutsche Bank analysts also began to pay attention to China’s auto industry on March 8, giving five stocks with buy ratings: Great Wall Motors, BYD, Ceres, Li Auto and Jiangling Motors.Only Li Auto is available in the U.S. – Michael Bloom reports
