China & Hong Kong Stock Picks (January 2025)
Americans fascinated by Chinese grocery prices + New Oriental Education, YUM China, Xpeng, JD.com, Baidu, iQIYI, Li Auto, NetEase, Tuhu Car, Will Semiconductor, Yancoal Australia, Ubtech Robotics, etc
Before we get to some Chinese stocks, there have been videos going around of about grocery prices in China which Americans find particularly fascinating for good reason: In California, a dozen or so eggs are now $8-12+ (thanks in part to the state’s bird flu hysteria and poor business climate for farming) while a pack of 10 eggs from a small shop around the corner from me in Kuala Lumpur are RM6 or US$1.35 (I took a picture and sent it to my parents…)…:
On the other hand, there are some BIG catches for Chinese people that Americans and others might not like:
And the previous videos don’t talk about Chinese salaries which are mostly going to be significantly lower than their American counterparts - especially for blue collar skilled tradesmen type work (which can easily pay six figures in the USA) and certain white collar professions (e.g. medical related)…
This Tweet delves into that:
Meanwhile, I should re-mention this piece that was noted in a recent Monday post and the key point it made about foreign investors ignoring Chinese stocks that don’t have USA listings:
💻 Tencent’s E-Commerce Play: The WeChat Mini Shop Revolution (The Great Wall Street - Investing in China) $
Investors outside mainland China have an incredible ability to ignore Tencent, Meituan (HKG: 3690 / 83690 / FRA: 9MD / OTCMKTS: MPNGF / MPNGY), and basically any company that isn’t listed in the U.S. No 13F filings, no Wall Street hype cycles, no constant ADR drama. Meanwhile, smaller, far less relevant companies get dissected like they’re the second coming of Apple. Tencent—the single most dominant company in China, shaping everything from payments to entertainment—somehow gets treated like a background character while people write essays about Baidu (NASDAQ: BIDU), a company that has spent the last decade perfecting the art of irrelevance. It’s genuinely mind-blowing. But fine, let’s fix that. Tencent’s latest e-commerce push is quietly becoming one of the most important shifts in Chinese tech, and as usual, no one is paying attention.
Again, our China, Hong Kong & Macau Stock Index has 255 China stocks, 43 Hong Kong stocks, and 7 Macau stocks (so far…) - most from these posts and thus have some local research coverage.
Stocks covered by a couple of equity research providers in this post include:
[Note: On desktop browsers, an autogenerated table of contents will appear on the left side linked to each stock. I will add those links below after publishing/emailing this post…]
Zhongji Innolight Co Ltd, China Life Insurance, Shengyi Technology, BYD Electronic International / BYD Company, Foxconn Interconnect Technology, InnoCare Pharma, Tuhu Car, Will Semiconductor Co Ltd, New Oriental Education, Tencent, Yancoal Australia, Wingtech Technology Co Ltd, JD.com, Great Wall Motor, Weichai Power, WuXi Biologics, iQIYI, Dmall Inc, Baidu, Q Technology (Group) Company, BeiGene, Zhejiang Leapmotor Technology Co Ltd, Xtep, Sichuan Kelun-Biotech Biopharmaceutical, ANTA Sports Products, CMGE Technology, YUM China, Innovent Biologics, Horizon Construction Development, Cimc Enric Holdings Ltd & Ubtech Robotics Corp Ltd
CMB International Capital Corporation, a wholly owned subsidiary of China Merchants Bank (SHA: 600036 / HKG: 3968 / OTCMKTS: CIHKY / OTCMKTS: CIHHF), has a monthly list of 20+ high conviction stock ideas - namely Chinese stock picks (see our May, June, July, August, September, October, November, December, January-February, March, April, May, June, July-August, September, October, November & December posts summarizing those) BUT these lists do not change too much from month to month. Stocks covered by the CMBI January 2025 list (including additions and deletions) and included in this post with updated stats and charts include:
Li Auto, Geely Automobile Holdings, Xpeng Inc, Zoomlion Heavy Industry, China Hongqiao Group, Bosideng International Holdings, Luckin Coffee, ANTA Sports Products, JNBY Design, YUM China, Proya Cosmetics, China Pacific Insurance (Group) Co (CR Beverage), BeiGene, Shanghai United Imaging Healthcare, PICC Property and Casualty Co Ltd, Tencent, NetEase, Alibaba, Greentown Service Group Co, Foxconn Interconnect Technology (FIT Hon Teng), Xiaomi, BYD Electronic International, Zhongji Innolight Co Ltd, NAURA Technology Group & Kingdee International Software
Note that Yahoo! Finance has changed their format and the screenshot of the chart (containing additional useful data) included for all stocks in this post is from (and linked back to) the main page.
And as always, this post is provided for informational purposes only (and to make your life easier…). It does not constitute investment advice and/or a recommendation…
🔬 Research analysis (including articles/blog posts from fund managers, etc.); 🎥 Video; 🎙️ Podcast; 🎬 Webinar; 📰 Newspaper/magazine article; 📯 Press release; 💻 Substack/blog/website article; ✅ Our own posts; 🗃️ Archived article; ⏰ Upcoming webinar or event; ⚠️ Disclosures or restricted access e.g. based on your location, investor status, etc.; 🇼 Wikipedia page; 🏷️ Tagged links to other posts about the stock.
Zhongji Innolight Co Ltd
🔬 Innolight (300308 CH) - Solid results despite supply chain constraints; expect for another strong year in 2025 (CMB International) 01-27 2025 ⚠️
🇨🇳👼🏻 Zhongji Innolight Co Ltd (SHE: 300308) - CNC equipment for motor winding manufacturing. 🇼 🏷️
Price/Book (Current): 6.41
Forward P/E: 14.53 / Forward Annual Dividend Yield: 0.45% (Yahoo! Finance)
China Life Insurance
🔬 China Life (2628 HK) - 4Q net profit could decline despite better capital market (CMB International) 01-27 2025 ⚠️
🇨🇳🏛️ China Life Insurance (SHA: 601628 / HKG: 2628 / OTCMKTS: CILJF) 🇨🇳 - Largest Chinese life insurer by market share. 🇼 🏷️
Price/Book (Current): 0.68
Forward P/E: 7.03 / Forward Annual Dividend Yield: 4.65% (Yahoo! Finance)
Shengyi Technology
🔬 Shengyi Tech (600183 CH) - Embracing AI and moving on to a new growth trajectory (CMB International) 01-27 2025 ⚠️
🇨🇳 Shengyi Technology (SHA: 600183) - Electronic circuit base materials. World’s 2nd largest CCL manufacturer. 🏷️
Price/Book (Most Recent Quarter): 4.69
Forward P/E: 24.51 / Forward Annual Dividend Yield: 1.62% (Yahoo! Finance)
