Top 10 US-Listed Chinese Stocks to Watch in 2024 After Policy Boost

On September 24th, the People's Bank of China announced a series of policy benefits. Since then, the Chinese A-share market has changed from its previous sluggish state, with prices soaring continuously for several days. At the same time, Chinese concept stocks in the U.S. market have also performed well. The NASDAQ Golden Dragon China Index (.HXC) rose by 9.13% on September 24th and started a multi-day consecutive increase.

By early October, according to predictions from several investment banks, if the Chinese government can continue to introduce new economic stimulus measures, the Chinese stock market may be on the verge of a new round of increases.

This article will illustrate top 10 US-Listed Chinese stocks following China policy surge for Canadian investors.

US-Listed Chinese stocks surge due to policy boost

In order to maintain stable economic growth and further reduce the financing and credit costs for businesses and residents, the People's Bank of China announced a reserve requirement ratio cut of 0.5 percentage points and a reduction in the policy interest rate by 20 basis points on September 24th. In the long term, these two loose monetary policies will release one trillion yuan (RMB) of liquidity into the market, which is undoubtedly good for the stock market.

But that's not all, on the same day, the People's Bank of China also announced the creations of Securities、 Funds and Insurance companies Swap Facility（SFISF）and targeted re-lending. These two policies aim to encourage investors to increase their holdings of stocks and provide convenience for this, which is rare in the Chinese market and can be said to be a policy explosion for the Chinese stock market.

Overall, the rise in the Chinese stock market caused by this policy explosion may also have the following three major impacts on US-listed Chinese stocks:

Emotional contagion

When the Chinese stock market rises due to policy support, it usually triggers an improvement in market sentiment. Investors may become more optimistic as they see the government's determination to support economic development. This positive sentiment is not limited to the domestic market but also spreads to the international market through various channels. For US-listed Chinese stocks, this improvement in sentiment means that investors may start to re-evaluate the value of these companies, thereby driving up stock prices.

Capital inflow

Capital flow is one of the important drivers of stock market movements. When the Chinese stock market rises due to policy benefits, it often attracts more global investors to pay attention to the Chinese market. These investors may invest funds in assets related to China's economic growth, including the stocks of Chinese companies listed in the United States. At the same time, the long-term low price range of the A-share market has led to the undervaluation of related Chinese assets, which may also be a major attraction for investors.

Improved performance expectations

The rise in the Chinese stock market, especially due to policy support, indicates that the government is taking measures to promote economic growth. In this case, the business environment for companies may improve, thereby enhancing their profitability. For Chinese companies listed in the United States, this means that their business performance in the Chinese market may be better, and the expectations for revenue and profit growth are enhanced. Investors, based on the expectation of future performance improvement, may buy these stocks in advance, thereby pushing up the prices of Chinese concept stocks.

Top 10 Chinese stocks to watch after policy boost

If investors are interested in focusing on and participating in the investment of US-listed Chinese stocks, here is a list of the top ten performing US-listed Chinese stocks after the People's Bank of China announced a series of policy stimuli on September 24th, for your reference.

Kanzhun (BZ)

Main Business: Kanzhun operates a well-known recruitment service app in China - BOSS Zhipin, which provides a direct communication platform for job seekers and employers through its mobile application.

Development Status: BOSS Zhipin is popular among young job seekers in China's recruitment market. It has become one of the leaders in China's online recruitment industry, with stable profitability, achieving a net profit of 417 million RMB in the second quarter, a year-on-year increase of 34.77%.

Future Outlook: With technological advancements, BOSS Zhipin may continue to use AI and big data to improve user experience and expand into overseas markets.

Bilibili (BILI)

Main Business: Bilibili is a video-sharing social platform, known for its rich subculture and community atmosphere.

Development Status: Bilibili has seen rapid growth in recent years, with an expanding user base and more diversified content types. Bilibili has a significant influence among young people, being an important video-sharing website in China, and holds a leading position in the long-video sharing domain, distinct from TikTok.

Future Outlook: Bilibili may further increase its investment in original content production and explore more commercialization paths to achieve profitability.

Tencent Music (TME)

Main Business: Tencent Music is Tencent's music streaming service platform, including brands such as QQ Music and Kugou Music.

Development Status: As one of the largest music streaming service providers in China, Tencent Music has a significant share in China's online music market. Tencent Music has a vast user base and, as a major player in a mature market, has robust profitability, achieving a net profit for four consecutive quarters. In the second quarter, the net profit was 1.794 billion RMB, a year-on-year increase of 33.09%.

Future Outlook: Tencent Music may continue to optimize user experience and explore collaborations with other forms of entertainment.

JD.com (JD)

Main Business: JD.com is an e-commerce company providing online sales of various products, from electronics to daily necessities.

Development Status: JD.com is the second-largest e-commerce platform in China, known for its fast logistics and delivery system. Its financial performance has been impressive, with net profit increasing for three consecutive quarters. In the second quarter, the net profit was 13.594 billion RMB, a year-on-year increase of 96.36%.

Future Outlook: JD.com will continue to use technology and logistics advantages to improve efficiency and service quality, and expand into new business areas. With the consumption upgrade in the Chinese market, JD.com may have even stronger profitability in the future.

XPeng (XPEV)

Main Business: XPeng is focused on designing and manufacturing smart electric vehicles.

Development Status: XPeng has a certain competitive edge in China's new energy vehicle market. And as an emerging electric vehicle manufacturer, XPeng has launched several electric vehicle models.

Future Outlook: XPeng will continue to develop new technologies, improve product performance, and explore international markets.

NIO Inc (NIO)

Main Business: NIO is also a manufacturer of smart electric vehicles.

Development Status: NIO has a certain market share in China's high-end electric vehicle market. At the same time, in order to gain market recognition, NIO places great emphasis on establishing its own brand image.

Future Outlook: NIO is committed to enhancing brand value, expanding production scale, and entering more international markets.

Li Auto (LI)

Main Business: Li Auto focuses on developing extended-range electric vehicles.

Development Status: Li Auto has a clear market positioning and performs exceptionally well in specific market segments. The models it launches have been widely praised. At the same time, as an emerging company in an industry that is still developing, Li Auto has already achieved profitability ahead of Xiaopeng and NIO.

Future Outlook: Li Auto will continue to improve its product line to meet consumer demands.

Futu Holdings Ltd (FUTU)

Main Business: Futu Holdings operates the online trading platform Moomoo and Futu Niu Niu, providing stock trading and consulting services.

Development Status: Unlike traditional brokerages, Futu focuses on attracting customers through the internet and creating an excellent customer experience, which has resulted in a large number of young users. By 2024, moomoo has successfully entered markets such as Canada, Australia, Singapore, Malaysia, and Japan, gaining recognition from local users. And moomoo has been selected as the Best Retail Broker in Singapore for two consecutive years. Financially, Futu has achieved consecutive growth in revenue and net profit for three quarters, with earnings per share reaching 8.66 HKD in the second quarter, a year-on-year increase of 8.39%.

Future Outlook: Futu may further expand its global business and add more financial products and services.

PDD Holdings (PDD)

Main Business: PDD Holdings is an e-commerce platform known for its group-buying model.

Development Status: PDD Holdings has grown rapidly in a short period, becoming a strong force in China's e-commerce market. With strong profitability, both revenue and net profit have continued to grow for several quarters. In the second quarter, the net profit was 32.009 billion RMB, a year-on-year increase of 144.20%. Thanks to this, the earnings per share also reached 21.61 RMB in the quarter, a year-on-year increase of 140%.

Future Outlook: In the future, PDD Holdings is expected to focus on technological innovation and application, enhancing operational efficiency while attracting new users.

Full Truck Alliance (YMM)

Main Business: Full Truck Alliance operates a logistics platform connecting cargo owners and truck drivers.

Development Status: Full Truck Alliance has become one of the largest freight logistics platforms in China. Thanks to the vast freight logistics demand in China, Full Truck Alliance has robust profitability, with overall stable growth in operating income. In the second quarter, the net profit was 841 million RMB, a year-on-year increase of 38.02%.

Future Outlook: Full Truck Alliance may continue to optimize its platform functions, improve efficiency, and seek more cooperation opportunities.

Final thoughts on Chinese stocks surge

The significant surge in Chinese stocks due to policy stimulation comes with risks. In the long run, Chinese stocks that attract the attention of global investors may experience an improvement in valuations and a stable increase in stock prices. But the short-term explosive rise might have already led to overheating and asset bubbles. Investors should be wary of the risks associated with potential short-term pullbacks in stock prices.