BAT refers to Baidu.com (BIDU-Q),Tencent Holdings Ltd (0700-HK), Alibaba Group Holding (BABA-N) that is often compared to the FANG stocks (Facebook (FB), Amazon (AMZN), Netflix (NFLX), and Alphabet (GOOG).
These three stocks large Chinese internet stocks have a large domestic markets so they can pull ahead of some American firms in some areas. The other stock suggestions are also Chinese stocks, but alternatives to tech.
Here are the top growing Chinese companies.
Sinopec Shanghai Petrochemical (SHI-N)
China’s largest petrochemical company. They synthesize materials from crude oil. Their 9-months net profit is up 13.6% year to year.
Chart shows a bottom at around $25 in 2012 and it now looks like it is trying to form a modified “cup and handle” and if it got above the $44 level, that would sort of be an All Clear sign to get up to the old high of around $63. Currently there is a…
They are a producer and distributor of oil and gas out of China. They also engage in exploration. They are state backed and so they have some stability. Their net profits for 2018 and expected to rise.
Alibaba Group Holding (BABA-N)
An e-commerce site that is China’s answer to Amazon. They also have a payments service, Alipay, and have entered the financial business. They also offering cloud
BABA vs. GOOG He'd go with Google. For Alibaba, gross margins have dropped in half. Challenge is that they want to continue to grow, so they have to subsidize the products they sell. For Google, 85% of revenue is still coming from search, but they're expanding what search means to people. Google is leaps and…
Tencent Holdings Ltd (0700-HK)
They own WeChat, which is a ubiquitous messaging application in China and Asia. They’re also working on creating an “app for everyone” through WeChat, where users can pay, and online gaming, among other features.
They've had some challenges. Longtime shareholders have done well. Tariff fears and high multiples have led to a nasty contraction. That said, the longterm outlook is good. Keep watching it, but the sell-off isn't over yet.
China’s largest search engine. With Google leaving China in 2010, the Chinese company has grown in an almost monopolistic way. It controls about 80% of the Chinese market. Baidu is similar to Google in the way that they offer other services, such as maps, social media, music, artificial intelligence, etc.
They have been investing a lot of capital into the mobile platform. It is founder lead. Their investments have always paid off. They are growing at a rate of 30% with a 22 PE. It has outperformed GOOGL-O over 5 years. If you missed GOOGL-O you can still have BIDU-O.
China Mobile Hong Kong (CHL-N)
They offer telecommunications and internet-related services in Mainland China and Hong Kong. They offer these services in all cities, and counties in their service area, and they are investing in their 4G network now.
The fundamental story on this is that it is, by far and away, the biggest global telecom company. Doing very, very well. Fundamentally, the Chinese government is trying to regulate, to ensure that China Telecom and China Unicom become much more significant in the market, but taking away some of the power that this company…
Ping An Insurance Group (2318-HK)
They are a personal financial services provider offering products and services in insurance, banking, investment, and Internet finance. They are also an asset manager, including investment, trading and brokerage. They recently announced a share repurchase plan, and their net profits rose year to year.
This is the largest life insurance company in China. It is a diversified, with 2/3 of their business life and nonlife, but they also have Ping An Bank and Ping An Trust, which issues wealth management products. She likes the insurance as a secular growth theme because of the big savings pool. People in China…
China Construction Bank Corp (0939-HK)
A commercial bank that operates through corporate banking businesses. They operate domestically and overseas. They had a shake-up in the executive composition late last year but profits are up, and they are still investing heavily, especially with the Chinese government.
Has looked at this a little. One thing that worries him about the Chinese is the inter-banking market, i.e., the banks lending to each other. Effectively they are listing loans up to an interbank market and they are being restocked into the economy. There is not the same governance as you would have in Canada,…
Industrial & Commercial Bank of China Ltd (1398-HK)
This is one of the “Big Four” state-owned commercial banks, and is the biggest bank in China. They are also the largest bank worldwide by total assets, customers, and employees. They invest heavily in government projects and in growing areas of the Chinese economy, as well as overseas. They operate in three segments: Corporate Banking, Personal banking and Treasury.
Fundamentally, do you really want to own Chinese banks here right now? A lot of the big banks in China actually have big government stakes and they have to invest in the growing portions of Chinese economy. Banking regulations for new banks have been very difficult to get. There are obviously some well-publicized issues with…