11 Cheap Chinese Stocks to Buy According to Analysts

Swati Goyal
8 min read

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In this article, we discuss 11 cheap Chinese stocks to buy according to analysts. If you want to see more stocks in this selection, check out 5 Cheap Chinese Stocks to Buy According to Analysts. 

China's stock market has been under immense pressure as monetary and fiscal stimulus measures struggle to have long-term impacts. The MSCI China Index, which captures large and mid-cap companies across China A shares, is down by more than 20% from January highs. The index is already in bear market territory as support measures designed to fuel investor sentiments prove to be short-lived.

The brutal selloff underscores the uncertain outlook of China's economy, which is only trying to bounce back following years of Beijing's disruptive zero COVID policy. Sell off in the first half of the year was also exacerbated by the country's central bank's failure to hint at the possibility of future stimulus measures.

In addition, sentiments about Chinese equities have taken a hit amid growing tension between Beijing and Washington. The US curbing the sale of some technologies in the semiconductor space to Chinese sentiments has only gone to rattle the market. With investors questioning the attractiveness of Chinese assets amid deteriorating economic ties, a deep selloff could always happen.

Nevertheless, the deep selloff has presented unique opportunities for high-risk tolerant investors. With valuations tanking significantly, Chinese equities are looking increasingly enticing compared to US equities with significant upside potential.

US equities have rallied significantly in recent weeks in the wake of the US Federal Reserve going slow on monetary policy tightening. The S&P 500 is already up by more than 15%, with tech-heavy Nasdaq up by more than 30%. As concerns about US equities valuations escalate, Chinese equities are the real deal on the value proposition.

Chinese Premier Li Qiang has reiterated that the country is on track to reach the annual growth target of 5% in the year's second half. The economy grew by 4.5% in the first quarter, better than expected. The World Bank has already raised China's growth forecast to 5.6% from 4.3%. The positive economic outlook should continue to strengthen sentiments on the highly battered Chinese equities.

11 Cheap Chinese Stocks to Buy According to Analysts
11 Cheap Chinese Stocks to Buy According to Analysts

Source: Unsplash

In addition to economic growth, easing regulatory crackdown is also offering support to Chinese equities, especially in the embattled tech sector. Premier Li Qiang's meeting with Alibaba Group Holding Limited (NYSE:BABA)'s cloud unit and Meituan (HKSE:3690.HK) showed that China is easing its pressure on the tech industry after a long period of scrutiny. He asked them to contribute more to the economic recovery and assured them of clearer and fairer rules for platform firms. This followed the end of a regulatory campaign that had imposed fines on Ant Group and Tencent and erased $1.1 trillion from the market value of the top players. The premier had also met with other tech leaders and urged local governments to support their businesses. This indicates that China is relying more on internet companies to achieve its industrial goals and create jobs and growth. Analysts welcomed the meeting as a sign of optimism for the tech sector and investors.

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