We recently published a list of 10 Cheap Chinese Stocks to Buy Now. In this article, we are going to take a look at where JD.com, Inc. (NASDAQ:JD) stands against other cheap Chinese stocks to buy now.

Chinese Market Outlook 2025

On February 12, Russell Investment released its Chinese market outlook for 2025. The investment firm noted that the outlook for China in 2025 is marked by several key factors, including the potential for new stimulus measures, advancements in artificial intelligence, and the impact of US tariffs on Chinese exports. Investors are closely watching whether the Chinese government will implement additional economic support measures, similar to those seen in 2024. This year, however, the landscape is complicated by the introduction of the DeepSeek AI model and the imposition of US tariffs on Chinese goods.

As per the report, the property sector remains a significant drag factor to China’s economy, with developers facing pressure and consumers cautious about purchasing property. Despite this, there are tentative signs of improvement in secondary home transactions, suggesting that supportive measures from 2024 may be starting to take effect. However, consumer confidence remains low, nearing the lows of the past four years. Moreover, the economy is also at risk of deflation, which could lead consumers to delay major purchases in anticipation of further price drops.

Russell Investment further noted that the National People’s Congress meeting in March will be crucial, as it will announce the economic growth target for the year and any new policy measures. If a growth target of around 4.5% is set, substantial stimulus measures may be required to achieve it. The United States has imposed a 10% tariff on Chinese imports, which China has responded to by placing tariffs on $14 billion worth of US goods. These tariffs are expected to reduce China’s GDP growth by about 0.3 percentage points.

On the bright side, China has seen significant advancements in AI, with companies like DeepSeek achieving notable gains. However, the export embargo on major chip manufacturers by the US poses a challenge to further AI development in China. The focus is likely to shift towards efficiency improvements in AI capabilities. Russell Investments views the outlook for Chinese equities as marginally positive. This assessment is based on a cycle, valuation, and sentiment framework. Despite economic uncertainties, Chinese companies have improved their return on equity, and analysts expect about 9% earnings-per-share growth in 2025. Valuations for Chinese equities appear reasonable compared to other emerging markets, with forward multiples at around 10 times and a PEG ratio at the 15th percentile historically.

Our Methodology

To compile the list of 10 cheap Chinese stocks to buy now, we used the Finviz stock screener, Yahoo Finance, and Seeking Alpha. Using the screener we aggregated a list of stocks trading below the forward P/E of 15 and earnings growth expectations this year. Next, we cross-checked the Forward P/E from Seeking Alpha and Earnings growth from Yahoo Finance. Lastly, after sorting our list by market capitalization, we ranked the stocks in ascending order based on the number of hedge funds holding each stock, sourced from Insider Monkey’s Q4 database of hedge funds.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

JD.com, Inc. (NASDAQ:JD)

Forward P/E Ratio: 10

Earnings Growth This Year: 34.61%

Number of Hedge Fund Holders: 78

JD.com, Inc. (NASDAQ:JD) is a major e-commerce company based in China. The company has become a leading player in the e-commerce segment through its robust supply chain networks. It sells a wide range of products online, including electronics, home appliances, fashion items, books, and more. Moreover, its strong logistics allow it to deliver products quickly and efficiently.

On March 3, Jiong Shao from Barclays maintained a Buy rating on the stock, with a price target of $55. During the fiscal third quarter of 2024, JD.com, Inc. (NASDAQ:JD) grew its revenue by 5% year-over-year, the improvement was driven by growth in general merchandise and electronic categories. Benefitting from its logistics and networking advantage the company improved its gross profits by 16%.

Ariel Global Fund in its Q4 2024 investor letter stated that the stock price of JD.com, Inc. (NASDAQ:JD) was negatively affected by investors taking profits after solid earnings and concerns about tariffs impacting the Chinese economy. This short-term volatility was seen as contrary to the company’s strong business fundamentals. The fund noted that despite short-term volatility they remain optimistic about the company’s long-term growth prospects. It is one of the cheap Chinese stocks to buy now.

Here’s what Ariel Global Fund stated regarding JD.com, Inc. (NASDAQ:JD) in its Q4 2024 investor letter:

“China-based E-commerce company, JD.com, Inc. (NASDAQ:JD) also detracted from performance over the quarter. The stock came under pressure as some investors took profits on solid earnings performance, while others became concerned with the implications tariffs could have on the Chinese economy. In our view, this share price action runs counter to the company’s solid business fundamentals. The home appliance trade-in program and popular shopping event, Singles’ Day, generated significant consumer spending across various product categories. Additionally, the company’s strategic decision to diversify general merchandise product offerings, expand its third-party marketplace business, and monetize advertising streams continues to aid the top and bottom-lines. Despite the near-term noise, we continue to view the company’s strategic positioning favorably and like JD.com’s long-term growth prospects.”

Overall, JD ranks 3rd on our list of cheap Chinese stocks to buy now. While we acknowledge the potential of JD to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than JD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap

Disclosure: None. This article is originally published at Insider Monkey.