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4 Chinese Tech Stocks to Buy in November

Chinese tech stocks have been outperforming over the last few weeks despite the market correction. Now that the election is over, there could be some nice breakouts in the sector. Investors should watch NIO, BABA, BIDU, and JD.

Although, there's no certain winner, early indications are that Republicans will retain control of the Senate, and Joe Biden will win the election. As a result, the iShares China Large-Cap ETF (FXI) is up 3.6%. A new administration might lead to a reduction in tensions between the two countries. A divided government also means that actions tend to be more measured.  
The potential transition from Trump to Biden presents a fantastic opportunity to invest in China stocks. In particular, China tech stocks are quite intriguing. The sector was showing relative strength before the election.
 
Let’s take a closer look at four of the most attractive China tech stocks: Alibaba Group (BABA), JD.com (JD), Baidu (BIDU), and NIO (NIO).
 
Alibaba Group (BABA)

BABA qualifies as a Chinese tech stock as it is an e-commerce giant. BABA makes it easy to buy products online. The company also provides cloud computing, logistics, and additional services to the ever-growing Chinese population. Investors should be salivating over BABA simply because the company’s divisions account for 50% of all web-based retail sales in the entire country.

Note that BABA is one of 5 stocks in the Reitmeister Total Return portfolio. Learn more here.

BABA has "A" grades in the Peer Grade, Industry Rank, Buy & Hold Grade, and Trade Grade POWR Rating components. More importantly, BABA is ranked above 114 other China stocks, taking the crown as the highest-ranked stock in the China industry.

The analysts are bullish on BABA, setting an average price target of $335.90, meaning the stock has the potential to increase more than 15%. BABA recently dipped from $317 to $290, creating an attractive buying opportunity. If you do not own BABA, now is the time to add it to your portfolio and hold the stock for years to come.

JD.com (JD)

JD.com might sound like a website tailored to law school students yet it is actually a Chinese direct sales business. The company’s website and mobile applications provide a wide selection of unique products ranging from digital offerings to car accessories, home appliances, luxury goods, furniture, food, cosmetics, and more. In short, JD sells just about everything.

JD has "A" POWR Ratings grades in the Industry Rank, Trade Grade, Peer Grade, and Buy & Hold Grade components. Out of 115 China stocks, JD is ranked second. Check out the average analyst price target for JD ($86.15) and you will find the stock has nearly 4% upside.

JD has thrived during the pandemic, delivering products to customers throughout China with remarkable efficiency. JD's net revenue is up nearly 30% across the first half of 202. The company's service revenue is up 34%. Furthermore, JD's product revenue is up 27%, meaning this company is perfectly positioned to rake in the cash as a second wave of the virus spreads across the globe.

Baidu (BIDU)

Internet search service providers have legitimate value. BIDU’s search service combined with its software applications, marketing services, and third-party websites is proving quite valuable as the internet becomes even more ubiquitous during the pandemic.

Check out the BIDU POWR Ratings and you will find the stock has "A" grades in the Industry Rank, Peer Grade, and Trade Grade components. BIDU is ranked 14th of 115 China stocks. The average analyst price target for BIDU is $156.56, indicating the stock has a 17% upside.

BIDU has a low forward P/E ratio of 18.65 considering it is a tech stock. In other words, BIDU is priced well below where it should be trading. Look for BIDU to return to its pre-COVID price of $144 in the months ahead.

NIO (NIO)

NIO is China’s EV superstar. Through NIO might not ever be as valuable as Tesla, it is well on its way to EV dominance in the East.

NIO has "A" POWR Ratings grades in the Buy & Hold Grade, Peer Grade, Industry Rank, and Trade Grade components. The stock is ranked 4th of 115 publicly traded companies in the China category. Of the 10 analysts to have performed a deep dive on NIO, six recommend buying, three recommend holding, and only one advises selling.

NIO delivered more than 5,000 EVs in October alone, more than doubling its total from a year ago. NIO's production capacity is set to rise to 5,000 vehicles per month, setting the stage for escalating sales figures that should move higher and higher with each passing month. Hop on the NIO train today and ride it to the promised land.

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NIO shares were trading at $38.48 per share on Wednesday morning, up $2.98 (+8.39%). Year-to-date, NIO has gained 857.21%, versus a 8.87% rise in the benchmark S&P 500 index during the same period.



About the Author: Patrick Ryan

Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management.

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