12 Best Chinese Stocks to Buy Now

Published May 24, 2023 at 8:01 am EDT Updated August 31, 2026 at 8:44 pm EDT

In this article we present the list of 12 Best Chinese Stocks to Buy Now.

Alibaba Group Holding Limited (NYSE:BABA), Pinduoduo Inc. (NASDAQ:PDD), and Trip.com Group Limited (NASDAQ:TCOM) are three of the best Chinese stocks to buy now according to some of the brightest and most successful money managers in the world.

Investors seem to be rather split on the Chinese market and the near-to-medium-term future of the world’s second-largest economy. Chinese stocks took a beating throughout much of 2021 and 2022, with the iShares China Index ETF, which tracks the 50 largest Chinese companies by market cap, losing 35% of its value during that time.

Those losses were in spite of a late 2022 rally driven by investor enthusiasm over the December withdrawal of China’s economically devastating zero-Covid policy. The rebound persisted into early 2023, but has since sputtered out and reversed.

Has China’s Expected Reopening Boom Been a Bust?

At the heart of the new investor uncertainty is the rather pedestrian performance of China’s economy during Q1, its first full quarter without Covid restrictions in place. Corporate revenue grew by just 1.5% during the quarter, falling well short of expectations, and imports fell by 8% (and another 7.9% in April), suggesting weak consumer demand.

And those are just some of the economic issues facing the country, which doesn’t even factor in the ball of wax that is the country’s geopolitical climate and regulatory backdrop, which kept many investors away from the country even when China was truly booming.

Analysts are still projecting China to grow GDP by as much as 6% this year, but that certainly seems doubtful in light of the country’s first quarter output.

Do the Potential Rewards From Chinese Investment Now Outweigh the Risks?

The weak overall sentiment towards China does provide bold investors with the opportunity to snatch up a wide range of quality Chinese stocks at a more than fair price. Many of the best Chinese stocks are trading well below analyst estimates, as we detailed in our look at the 10 Most Promising Chinese Stocks According to Analysts.

Several Chinese companies are also among the most profitable in the world, as we discovered during our research of the 11 Most Profitable Chinese Stocks, as they pull in tens of billions of dollars in net income annually. Unfortunately, most of those stocks don’t trade on U.S. exchanges.

The best Chinese stocks to buy now also provide exposure to various industries, including e-commerce, electric vehicle automakers, biotechs, and real estate platforms, so there’s bound to be something of interest for investors of all stripes.

Let’s get into it then and see which Chinese stocks are the best to buy in 2023.

Photo by Edward He on Unsplash

Our Methodology

The following list of the Best Chinese Stocks to Buy Now is ranked based on hedge fund sentiment. We follow a select group of hedge funds because Insider Monkey’s research has uncovered that their consensus stock picks can deliver outstanding returns.

All hedge fund data is based on the exclusive group of 900+ funds tracked by Insider Monkey that filed 13Fs for the Q1 2023 reporting period.

12 Best Chinese Stocks to Buy Now

12. XPeng Inc. (NYSE:XPEV)

Number of Hedge Fund Shareholders: 20

Trip.com Group Limited, Alibaba Group Holding Limited, and Pinduoduo Inc. are three of the best Chinese stocks to buy now according to hedge funds. Another compelling stock in the same vein is Chinese automaker XPeng Inc. (NYSE:XPEV), which saw a slight uptick in ownership among the select group of hedge funds tracked by Insider Monkey during Q1 following four consecutive quarters of selling.

Overall, there’s been a 42% decline in the number of funds long XPeng Inc. since the final quarter of 2021. Jos Shaver’s Electron Capital Partners added XPEV to its 13F portfolio during Q1, while Cliff Asness’ AQR Capital Management unloaded its stake.

XPeng Inc. launched its P7i sports sedan in March and order intakes for the vehicle have been solid. In April, the automaker delivered just over 7,000 smart EVs, a slight uptick from a month earlier. The company has also been working furiously to speed up production and reduce costs, which resulted in the development of a new in-house vehicle-making platform which it unveiled last month. XPeng believes the new platform could reduce the costs of making powertrain systems and intelligent driving systems by 25% and 50% respectively by the end of next year.

11. Zai Lab Limited (NASDAQ:ZLAB)

Number of Hedge Fund Shareholders: 21

There’s been a similar hedge fund flight in recent quarters from Zai Lab Limited (NASDAQ:ZLAB), the Chinese biopharmaceutical company that has more than 50 clinical trials underway. There’s been a decline in smart money ownership of the stock during five of the past six quarters, amounting to a 43% drop during that period. Andreas Halvorsen’s Viking Global holds the biggest position in ZLAB as of March 31, totaling 2.33 million shares valued at $77.5 million.

One of 10 High Growth Chinese Stocks To Buy, Zai Lab Limited could see no less than eight new drug launches in the coming three years, which would further augment its existing stable of four cancer treatments. Zai Lab has a big advantage over American biotechs in that regard, as the regulatory process for drug approval is far quicker and much less costly in China than it is in the U.S.

Citi believes Zai Lab Limited has a solid commercial foundation in place but that the big question now is whether or not the company can succeed with its next wave of product launches and drive revenue higher like the market has been waiting for. Citi has a $130 price target and ‘Buy’ rating on the stock.

10. Li Auto Inc. (NASDAQ:LI)

Number of Hedge Fund Shareholders: 22

Li Auto Inc. (NASDAQ:LI) is another Chinese automaker that is relatively popular among top hedge funds, being owned by 22 of them as of March 31. That’s nonetheless down from a peak of 31 during the fourth quarter of 2020. Vincent Gao’s CoreView Capital and Yi Xin’s Ariose Capital are quite bullish on Li Auto Inc., having greater than 10% 13F exposure to the stock.

With supply chains in China improving late last year, the electric automaker had a strong close to 2022, hitting a record number of vehicle deliveries in December and growing total vehicle deliveries by 31.5% during Q4. That spurred Li Auto Inc. to 66.2% sales growth during the quarter, while gross profit rose by 49.8% to $518 million.

9. Vipshop Holdings Limited (NYSE:VIPS)

Number of Hedge Fund Shareholders: 29

Vipshop Holdings Limited (NYSE:VIPS) surged in hedge fund popularity during Q1 of 2021 when the stock briefly surged by as much as 62% during the quarter. Both of those gains were short-lived however, as the stock had given back all of those gains by May and hedge funds quickly began heading for the exits. Hedge fund ownership of VIPS is down by 46% since that quarter.

Vipshop Holdings Limited still ranks as one of the best Chinese stocks to buy now despite its revenue growth streak coming to an end in 2022. The online retailer, which sells discounted brand-name apparel and accessories, is a highly profitable company, growing adjusted net income by 14% during 2022 and earning $0.53 per share in adjusted earnings during Q4.

Vipshop Holdings Limited shares are also trading at fairly attractive valuations on both the sales and earnings fronts, including boasting a forward earnings ratio of just 8.16x and a price-to-sales ratio of 0.64x.

8. New Oriental Education & Technology Group Inc. (NYSE:EDU)

Number of Hedge Fund Shareholders: 31

New Oriental Education & Technology Group Inc. was considered one of the best Chinese stocks to buy among hedge funds for several quarters in 2020 and 2021. However, sweeping government regulations that impacted the for-profit education sector in China sent hedge funds running from the stock in 2022.

Nonetheless, several funds maintain high conviction in New Oriental Education & Technology Group Inc. as it adjusts to and navigates the new environment, including Fang Zheng’s Keywise Capital Management, which is the company’s largest shareholder and boasts a whopping 35% 13F exposure to the stock.

One way in which New Oriental Education & Technology Group Inc. is taking charge of the situation is by expanding its testing and studying services into overseas markets, which it grew by 13% and 5% respectively in its fiscal Q3 of 2023. The company’s overall net revenue grew by 22.8% to $754 million, while net income surged by 167% to $81.6 million.

7. Yum China Holdings, Inc. (NYSE:YUMC)

Number of Hedge Fund Shareholders: 35

Yum China Holdings, Inc. (NYSE:YUMC) has been one of the most stable Chinese stocks in terms of hedge fund ownership over the past several years and the number of funds long YUMC remained flat during Q1. Guardian Capital’s GuardCap Asset Management holds by far the largest YUMC position, owning 8.69 million shares worth $551 million as of March 31.

With Covid lockdowns now over in China, Yum China Holdings, Inc. was able to accelerate its growth in Q1 of this year compared to a year earlier, growing revenue by 9% to $2.92 billion and same-store sales growth by 8%. It also achieved triple-digit growth in most profitability metrics, including a 189% surge in net income to $289 million.

Baron Funds is bullish on Yum China Holdings, Inc.’s strong balance sheet and earnings power, as it discussed in its Q2 2022 investor letter:

“Shares of Yum China Holdings, Inc., master franchisee for KFC and Pizza Hut in China, rose in the second quarter, largely due to a recovery from weakness in the prior two quarters as COVID-related restrictions started to ease. We believe Yum China’s fortress balance sheet will allow it to navigate even prolonged rolling lockdowns in China and accelerating underlying unit growth at high returns on capital implies earnings power as reopening continues.”

6. KE Holdings Inc. (NYSE:BEKE)

Number of Hedge Fund Shareholders: 39

KE Holdings Inc. (NYSE:BEKE) closes out the first half of our list of the best Chinese stocks and has proven to be consistently popular among hedge funds. Overall ownership of the stock has remained virtually unchanged over the past six quarters, though several of the company’s biggest shareholders were adding to their positions in Q1, including Lei Zhang’s Hillhouse Capital Management and Philippe Laffont’s Coatue Management.

KE Holdings Inc. is a major player in the Chinese real estate market, operating two platforms that allow homeowners and homebuyers to connect. It accounted for about 21% of the gross transaction volume of all home sales in China during Q4 of 2022 and has a staggering 267 million homes in its database.

KE Holdings Inc. has also been expanding into other segments of the housing market that could provide valuable synergies, including the home renovation market when it purchased Shengdu Home Renovation last year. That acquisition helped KE Holdings grow its renovation revenue 25-fold in 2022 to $700 million.

Pinduoduo Inc., Trip.com Group Limited, and Alibaba Group Holding Limited are near the top of the list of best Chinese stocks to buy now. See where they rank and why they’re so coveted by clicking the below link.

5. Trip.com Group Limited (NASDAQ:TCOM)

Number of Hedge Fund Shareholders: 41

There was a small rise in hedge fund ownership of Trip.com Group Limited during Q1 and the Chinese travel services provider is about as popular with hedge funds as it’s been at any time over the past six years. Richard S. Pzena’s Pzena Investment Management has the largest long position in TCOM as of March 31, while Gregard Heje’s Kontiki Capital has greater than 18% 13F exposure to the stock.

Analysts are bullish on Trip.com Group Limited ahead of the company’s first quarter earnings report, which is estimated to come out on June 26. Citi has a “90-day positive catalyst watch” on the stock in light of positive demand trends and believes the company has a decent chance to upend earnings estimates. TD Cowen also raised its price target on TCOM shares to $44 from $40 back in early March on signs that the company’s revenue has fully rebounded from Covid headwinds.

Artisan International Value Fund expects Trip.com Group Limited‘s earnings to take flight in 2023 according to its Q4 2022 investor letter:

“Trip.com Group Limited, a Chinese online travel agency, was the second-largest contributor to return in 2022. Trip.com is the dominant supplier of online travel reservations and is expected to benefit from China’s loosening COVID-19 restrictions on both domestic and international travel. Management of Trip.com has wisely spent the COVID-19 lockdown period reinforcing and improving the company’s market position and reducing unnecessary costs. We expect earnings to boom over the next year as travel picks up. Other investors appeared to agree, pushing the share price up 42% in 2022.”

4. Baidu, Inc. (NASDAQ:BIDU)

Number of Hedge Fund Shareholders: 43

As with Vipshop Holdings Limited, which ranked 9^th on this list, Baidu, Inc. (NASDAQ:BIDU) also experienced a massive surge in hedge fund ownership during Q1 of 2021. That surge was as equally short-lived as Vipshop’s was, and two years later, Baidu has less than half the hedge fund shareholders that it did then.

Baidu, Inc.’s growth has slowed in recent quarters, with revenue rising by just 10% year-over-year in Q1 to $4.54 billion. However, the company is becoming quite a bit more profitable as it improves its operational performance, with non-GAAP net income climbing by 48% year-over-year to $834 million, while non-GAAP diluted earnings per ADS grew by 43% to $2.34.

Horos Asset Management took advantage of weakness in Baidu, Inc. shares to load up them, as it detailed in its Q4 2022 investor letter:

“As I mentioned at the beginning of this quarterly letter, we took advantage of the meltdown in technology platforms to initiate new positions in companies in which we had already been shareholders in the past and whose valuation did not, until now, provide a sufficiently high margin of safety. Such is the case of PayPal and Baidu, Inc..

In the case of Baidu, as many will know, it is known as the “Chinese Google”. The company has been the leading Internet search engine in the Asian country for years, which has given it a historically privileged position to monetize, through online advertising, a huge user base. However, the rise of two types of applications has called into question the sustainability of its business model. On the one hand, mobile social apps, such as ByteDance’s well-known TikTok, have emerged as a new model of online consumption, generating a new platform through which to monetize Internet users. On the other hand, even more disruptive in the long term, is the emergence of the so-called super apps: a sort of virtual Swiss Army knives that allow users to access many products and services without having to leave their interface at any time, making Baidu’s traditional search engine less attractive. In this field, Tencent (with its super app Weixin/WeChat), Alibaba (Alipay) and Meituan certainly stand out. These two factors have caused Baidu’s online advertising market share to drop from 17% in 2017 to less than 7% estimated for 2022.34 To this deterioration, we should add the collapse in market value of its stake in iQiyi (video platform controlled by Baidu) and its equity holdings such as Trip.com (hotel and flight platform) …” (Click here to read the full text)

3. JD.com, Inc. (NASDAQ:JD)

Number of Hedge Fund Shareholders: 59

JD.com, Inc. (NASDAQ:JD) has been one of hedge funds’ favorite Chinese stocks for several years. The company even ranked among the 30 most popular stocks among hedge funds back in 2020. Hedge fund ownership of JD has fallen by 38% since the end of 2020 however, though the stock still ranks as hedge funds’ third-favorite Chinese stock. Chase Coleman’s Tiger Global Management has been a longtime backer of JD.com, Inc. and several other Chinese stocks and held a $1.06 billion stake in the company as of March 31, owning 24.1 million shares.

JD.com, Inc. has a huge e-commerce footprint in China, boasting over 1,500 warehouses and employing more than 300,000 delivery personnel. The company grew net revenue at a 24% CAGR between 2017 and 2022, with its net services revenue growing at a 42% clip during that period. The boost in marketing and logistics services activity has helped make JD a more profitable company, as its non-GAAP net margin grew by 144 basis points year-over-year to 3.1% in Q1.

2. Pinduoduo Inc. (NASDAQ:PDD)

Number of Hedge Fund Shareholders: 62

Unlike most of the stocks on this list, Chinese e-commerce company Pinduoduo Inc. has been rising in popularity among the smart money in recent quarters and hit an all-time high in hedge fund ownership during the first quarter of this year. Kerr Neilsen’s Platinum Asset Management and Daniel Gold’s QVT Financial added PDD to their 13F portfolios during Q1.

Pinduoduo Inc. has had a rough spring on the stock market, losing 28% of its value since the end of February. In March, the company’s app was removed from the Google Play Store after Alphabet found malware lurking in some versions of the app. The app for Pinduoduo’s Temu, which is the international expansion arm of the company, is still available.

Those concerns aside, Pinduoduo Inc. also missed top-line estimates with its latest earnings report, though revenue nonetheless grew by an impressive 46% year-over-year to $5.77 billion. Temu is in the midst of a push into the U.S. (you’ve probably seen some of its ads) and the e-commerce platform has been gaining some traction thanks to its rock-bottom prices and host of other customer-friendly policies. Temu was the most downloaded app in the United States from late-February to late-March, with 10 million downloads.

1. Alibaba Group Holding Limited (NYSE:BABA)

Number of Hedge Fund Shareholders: 128

Topping the list of best Chinese stocks to buy now in a landslide is Alibaba Group Holding Limited, which has more than twice as many smart money investors as the runner-up. Alibaba did experience a big decline in hedge fund ownership in the second-half of 2021 and remains well off its all-time highs, but money managers have been buying back into the company in recent quarters.

Alibaba Group Holding Limited is undergoing an organizational restructuring which the company believes will allow it to be more efficient and could lead to some of the new business units being spun off as separate public companies. That provides some intriguing potential catalysts for Alibaba investors in the future, which likely explains why hedge funds have been adding it back to their portfolios.

L1 Long Short Fund believes Alibaba Group Holding Limited’s organizational restructuring will help unlock some of its sum-of-the-parts valuation discount, as it revealed in its Q1 2023 investor letter:

“Alibaba Group Holding Limited (Long +16%) shares performed strongly based on favourable sentiment surrounding China’s re-opening and indications from Chinese authorities that the prolonged restructuring process of Alibaba/Ant Financial was finally drawing to a close. The company remains a high-quality business with leading positions in both eCommerce and Public Cloud. We exited our position in January at around US$116 per share with the shares having rallied more than 90% since their early November lows and our China re-opening catalyst having played out. We subsequently re-entered the position in March with the shares having pulled back and with the company announcing a new organisational and governance structure. Alibaba has announced plans to split into six major business groups – Cloud Intelligence, Taobao Tmall, Local Services, Global Digital, Cainiao Smart Logistics and Digital Media and Entertainment Group. Each of these groups will be managed independently (separate CEO and board) and have the flexibility to raise external capital and potentially pursue separate IPOs. We believe this announcement is a strong catalyst to unlock the inherent sum-of-the-parts valuation discount in the company.”

Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below. For more of the latest stock picks worth considering for your portfolio, check out 11 Stocks with Heavy Insider Buying and 15 Stocks Warren Buffett Sold.