Deutsche Bank analysts initiated coverage of the Chinese auto sector with five stocks recommended as “buy.”
While many analysts are skeptical that China can reach its growth target of around 5% for 2024 without further stimulus, the country still reported better-than-expected economic data on retail sales, industrial production, and investments in real estate for the first two months of the year.
Here are the Chinese stocks that analysts are optimistic about:
Tencent Music Entertainment
Citi upgraded the stock to buy on Wednesday with a price target of $13 per share, up nearly 18% from Tuesday’s close. The company operates one of China’s leading alternatives to Spotify.
TME’s fourth-quarter results beat expectations, helped by "excellence in online music revenues," the Citi report said.
“We believe TME’s subscription music business, steady/resilient with capacity for music value chain expansion and long-term audio format growth and diversified usage scenarios across multi-channels/devices, would support a growth outlook sustained,” the analysts added.
Kingsoft Cloud
JPMorgan upgraded the cloud services company to overweight, but cut its price target by 30 cents to $4.20 per share based on a lower revenue forecast.
JPMorgan expects the company to break even in the first quarter on earnings before interest, tax, depreciation, and amortization. The company is expected to break even in 2024 — for the first time. This is contrary to the consensus view of a loss of earnings before interest, taxes, depreciation, and amortization.
Their positive outlook is based on revenue shifting to higher-margin sources such as Kingsoft’s rapidly growing AI business, as well as a decline in costs due to business cancellations in the third quarter.
Vnet Group
BofA raised its outlook on the data center company with a price target of $2.70, down from $3.90 previously but still up 35% from the shares’ close Tuesday.
Analysts expect the arrival of a local government contract and demand from short-video companies to boost VNET’s revenues in the coming years. The company already operates data centers in more than 20 cities in China.
Bilibili
JPMorgan upgraded shares of video streaming and gaming company Bilibili to neutral from underweight with an $11 price target.
Analysts expect Bilibili to hit its double-digit revenue growth target for the year with the help of new game launches. They also pointed out that the company achieved two-quarters of positive operating cash flow in 2023.
Deutsche Bank analysts also initiated coverage of the Chinese auto sector with five stocks recommended as “buy”: Great Wall Motor, BYD, Seres, Li Auto, and JMC.
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Original article published on Money.it Italy 2024-04-12 07:00:00. Original title: Cina, 4 azioni da comprare ora
