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Best China stocks to watch in 2020

The Chinese companies have been struggling in the US stock exchanges due to trade tariff disputes and economic growth concerns. However, in 2019, China turned out to be one of the top-performing stock markets in the world. Let’s take a look at the best Chinese companies that have the potential to outperform in 2020.

Alibaba Group Holding Limited (NYSE: BABA) stock climbed to an all-time high of $213.58 on December 20. The market analysts believe that Alibaba stock could grow higher due to the strong demand amidst a weaker Chinese economy, protests and violence in Hong Kong, and the US-China trade war. The globalization, big data, and cloud computing could be beneficial in 2020. For the second quarter, Alibaba reported a 40% jump in the top line on the China commerce retail business and Alibaba Cloud.

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Image for representation. Courtesy: Austin Distel on Unsplash

Pinduoduo Inc. (NASDAQ: PDD) stock has risen over 69% in the past year and over 8% in the past three months. The company has been struggling against the top titans Alibaba and JD, who were expanding more aggressively into the low-tier cities. For the third quarter, the company posted a 123% surge in the top line backed by an increase in online marketing services revenues. The stock is likely to be on the watch for 2020.

ZTO Express (NYSE: ZTO) stock has risen over 46% in the past year and is near the record high of $23.12. Investors were positive about the company’s future after the better-than-expected third-quarter earnings. The quarterly results benefited from impressive parcel volume growth. The stock is expected to trend upward during 2020 based on the promising forecast and returns.

Baozun Inc. (NASDAQ: BZUN) stock has risen over 16% in the past year while falling over 26% in the past three months. The company was impacted by fire damage and class action lawsuits. For the third quarter, Baozun posted a 32% jump in earnings helped by growth in services and product sales. The stock could on the investors’ watch list for 2020.

Luckin Coffee Inc. (NASDAQ: LK) stock nears the 52-week high of $33.58 and has risen over 58% in the past year with over 50% coming in the recent three months. The company reported a narrower-than-expected loss in the third quarter driven by a 540% jump in the top line. The stock is expected to continue rallying in the next several years backed by robust top and bottom lines growth as well as the booming retail coffee market in China.

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NetEase (NASDAQ: NTES) stock has risen over 30% in the past year and over 14% in the past three months. The gaming business continues to drive the company’s results. For the third quarter, the company posted better-than-expected results driven by lower marketing expenditures related to online games. The stock is likely to be on the watch list as it offers stable and decent growth rates.

Baidu (NASDAQ: BIDU) stock has fallen over 20% in the past year while it has risen over 22% in the past three months. The robust growth in the Baidu App traffic drove the third-quarter results, which was better than the analysts’ expectations. This week, the company has been on the news of its deal with Samsung Electronics on the joint mass-production of artificial intelligence chips. The stock could be on the watch list for 2020.

Weibo (NASDAQ: WB) stock has fallen over 16% in the past year and over 3% in the past three months. The investments in the creation of content remained the major concern for Weibo as the third-quarter earnings were hurt by an increase in costs and expenses. The stock, meanwhile, is likely to take the upward journey during 2020 on improving economic conditions, waning geopolitical uncertainty, and a rebound in corporate confidence.

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JD.com (NASDAQ: JD) stock soared to an 18-month high of $35.52 on December 20 and has risen over 74% in the past year. The company topped revenue and earnings estimates for the third quarter. The stock is likely to rise in 2020 driven by the easing trade tensions. The fundamentals are expected to improve over the next several months backed by a possible boost in the entire economy.

Bilibili (NASDAQ: BILI) stock has risen over 23% in the past year with over 18% coming in the recent three months. A 71% jump in expenses impacted the bottom line results for the third quarter. The company stands beneficial by mobile games, live video broadcasts, and value-added services like virtual gifts. The stock is set to gain momentum during 2020 backed by new users accumulation.

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