In 2025, I Hold Stakes in Three Notable Chinese Companies
In 2025, I Hold Stakes in Three Notable Chinese Companies
If you've made it this far, congrats! It seems like Chinese stocks aren't exactly the top pick for many stateside investors at the moment. With tensions rising over tariffs and TikTok's potential ban, skirting exposure to China seems like an appealing option with a world of opportunities available elsewhere.
I'm here to tell you that I strongly disagree. China remains one of the world's biggest economies, and while risks are higher in these uncertain times, that also means lower valuations for quality investments with years, if not decades, of impressive financial performance.
With that being said, let me introduce you to three Chinese stocks that I believe are worth your consideration as we head into the new year: Baidu, Alibaba Group, and Qifu Technology.
1. Baidu
Baidu is much more than just a search engine. For decades, it's held that title in China, but it's also become a major player in autonomous driving, robotics, machine learning, computer vision, and all things AI. Plus, given China's AI boom, being ahead of the curve has its perks.
Baidu has faced some challenges. It's only posted double-digit revenue gains once since 2018, and investors have taken notice. Shares even tumbled by 29% last year, making it the only one on this list to take a dip in 2025.
However, things are looking up. Baidu's operating profit has shown improvements, and with shares drifting even lower, the stock is trading at an attractive price point. It's currently trading for less than eight times trailing adjusted earnings and features a double-digit net margin. Not too shabby.
2. Alibaba
Alibaba's a massive e-commerce player in the world's second-most populous nation. Like Baidu, it's faced its fair share of challenges. It's only managed to post a quarter of double-digit top-line growth over the past 12 quarters, but that doesn't mean it's a lost cause.
Alibaba's known for its influential Singles Day, and revenue has exploded more than 250-fold since 2009. It's been focusing on shedding some non-core assets, but that's not a sign of retreat. Far from it. Analysts see revenue and earnings growth accelerating in its new fiscal year that begins in April.
At just nine times forward adjusted earnings, Alibaba is an attractive bet. Plus, it returns money to its investors through semiannual distributions, currently yielding 2.5%. If you play your cards right, this could be an excellent opportunity to capture a piece of China's growing economy.
3. Qifu Technology
Qifu Technologies is the smallest of the three, but with a market cap of $5.6 billion and trailing revenue of $2.3 billion, it's not exactly tiny. Qifu provides credit solutions to customers via its platform, serving consumers and small and medium-sized businesses. It focuses on a market often overlooked by larger players – younger individuals and rural territories.
The company is consistently profitable, with a share buyback plan that's already seen the stock more than double in 2025. Plus, Qifu pays out semiannual distributions, currently yielding 3.3%. If you're looking for undervalued stock with serious growth potential, Qifu might just be it. It's trading for just six times its forward profit target.
In a world where investors are shying away from Chinese stocks, it may seem like a risky move to invest in them. But as long as you've done your due diligence and are willing to take on the associated risks, there's still plenty of potential for impressive returns.
Introducing these Chinese stocks as potential investments, the author mentions that despite the challenges and lower valuations due to geopolitical tensions, investing in China remains an appealing option due to its status as one of the world's biggest economies with years of impressive financial performance.
In the context of discussing the attractiveness of Baidu, the author mentions that the stock is currently trading at an attractive price point due to its lower valuation, making it an appealing investment opportunity for investors.