BABA ON THE MOON PLEASE
15/09/2021 15:42 – MTFL
3 Top Chinese Stocks to Watch in September
It’s scary to invest in stocks from China these days, considering what’s going on in the country. Government crackdowns, cancellations of IPOs, and increased regulations are all reasons for alarm. Recently, government authorities took aim at ride-hailing apps for using unqualified drivers and misleading advertising. There’s also concern that accounting practices at Chinese companies lack the level of scrutiny found in other countries, creating an increased potential for fraud — the downfall of Luckin Coffee being a notable example. Such situations amplify worries that Chinese companies could be delisted from U.S. exchanges. However, the hesitation that these concerns have raised among investors also provides an opportunity to buy stocks with ridiculous growth potential and already rock-steady fundamentals. If you’re willing to look past the sector’s overall risks, Alibaba , BeiGene , and Tencent Music are three Chinese stocks worth watching this month. Alibaba has gone on sale Alibaba is often called the Chinese version of Amazon. As the ninth largest company in the world by market cap, Alibaba is also a convenient target for Chinese regulators, and its AutoNavi ride-hailing application was among those the transport ministry recently criticized. In April, regulators fined the company $2.75 billion, citing violations of antimonopoly rules. However, considering how far the stock has fallen this year — more than 27% — it’s worth noting how fundamentally sound the company’s financials are. Alibaba’s revenue has increased every year for more than a decade, including a 41% rise in fiscal 2021 to $109.4 billion. Net income has also risen consistently every year, with only one exception in 2017. The company made it through the toughest part of the pandemic last year without missing a beat, recording $21.8 billion in sales, up 2% year over year. Even with the recent crackdowns, the company’s business seems largely unaffected. In the first quarter of fiscal 2022, ending June 30, the company reported revenue of $31.8 billion, up 34% over the same period in the prior year. Net income fell just 8% year over year to $6.6 billion. There are a lot of things to continue to like about this company. For one, it just approved a buyback program for $15 billion worth of shares through 2022. Management also recently pledged the equivalent of $15.5 billion to invest in technology innovation, economic development, high-quality employment creation, care for vulnerable groups, and the establishment of a "common prosperity development fund." Investors weren’t thrilled with this idea — on Sept. 2, the day it was announced, the stock dropped by nearly $6 — but it could help Alibaba’s reputation with Chinese regulators. Companies with growth such as Alibaba’s often trade for high multiples, but after the past few months, it has a price-to-earnings ratio of 21.1, more in line with an old-line value company.
via r/wallstreetbets https://ift.tt/3qhG8Zq
September 15, 2021 at 11:25AM