- Chinese stocks are starting to rebound again after a crisis with heavy losses.
- Quarterly results from Chinese companies show that the strongest today are those involved in media and entertainment, JPMorgan said.
- The bank’s strategists consider Alibaba’s fundamentals to be very negative at the moment, in addition to increased competition from other companies.
- Among the companies that JPMorgan recommends buying are Xiaomi, Tencent, and Lenovo.
Some Chinese stocks have started to rebound in recent days, after several months of absence. In this context, there are some opportunities, commented JPMorgan.
Although the recovery in China is indeed average and the government support is not as expected, analysts expect this to change in the first quarter of 2024.
JPM’s equity macro research team, led by Wendy Liu, believes that Chinese stocks should be bought before the end of the year and focuses on two sectors: media and revenue.
China stocks but no Alibaba
The bank considers that Alibaba’s fundamentals are not the best in this context. Shares fell after the company scrapped its plans for an IPO in the cloud business.
This frustrated investors, and competition increased.
The five Chinese stocks named by JPMorgan
One thing that is important to clarify is that the bank analyst is thinking of political and commercial relations between China and the United States, an issue that is in the eye of the storm.
Because of this, the American president recently met in San Francisco with Joe Biden and Chinese President Xi Jinping with the aim of re-establishing relations.
“If the United States raises a hand, China will take it and shake it. But if the United States becomes hostile to China, then China will retaliate, said Jian Shi Cortesi, chief investment officer and member of the global equities team at GAM Investments