Five Chinese internet tech companies to watch: BABA, JD to WB

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Highlights

  • Alibaba Group Holding Limited (NYSE: BABA) has a P/E of 24.37 and a forward P/E for one year of 13.65.
  • com, Inc. (NASDAQ: JD) has a forward P/E for one year of 46.31.
  • NetEase, Inc.’s (NASDAQ: NTES) P/E ratio is 23.53, and the dividend yield is 1.81%.

On Friday, technology stocks led the rally in Chinese shares in the premarket after Beijing hinted at an economic stimulus package to accelerate growth. It raised hopes of easing curbs on the internet and technology companies. The ruling communist party said the government would declare measures to support economic growth.

Bloomberg reported that China plans to hold a symposium with big tech companies after the Labor Day holiday. Beijing is also discussing logistics with the American regulators about allowing on-site audit inspections of US-listed Chinese companies.   

On Friday, the Xi Jinping led communist party said the government would consider tax cuts, new monetary policy tools, investments, and other supportive policies to boost growth.  

After the announcement, shares of Chinese technology companies rallied in the US market. Here we discuss five Chinese internet and technology stocks that rebounded on Friday.

Alibaba Group Holding Limited (NYSE: BABA)

Market Capitalization: US$244.3 billion

Hangzhou, China-based Alibaba stocks jumped 12.17% to US$101.97 at 6:12 am ET in the pre-market. Alibaba is one of the largest e-commerce companies globally by-merchandise volume. The stock plunged 61.18% in one year due to limitations clamped by authorities. 

The stock closed at US$90.91 on April 28, with a 2.93% gain. It has a P/E of 24.37 and a forward P/E for one year of 13.65.

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On March 21, the company announced increasing its share repurchases from US$15 billion to US$25 billion, indicating the company’s confidence in growth. The Share Repurchase Program is effective for two years through March 2024.

For the quarter ended December 31, 2021, the company reported revenue of RMB 242,580 million (US$38,066 million), a 10% increase YoY. The net income was RMB 19,224 million (US$3,017 million), down 75% YoY. The diluted earnings per ADS were RMB7.51 (US$1.18). 

This stock traded in the range of US$239.22 to US$73.28 in one year. 

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JD.com, Inc. (NASDAQ: JD)

Market Capitalization: US$90.15 billion

Beijing-based JD.com is the second-largest e-commerce company after Alibaba in transaction volume. The stock was trading 14.34% higher to US$66.10 at 6:13 am ET. On April 28, the stock closed at US$57.81 with a 0.68% gain. Its forward P/E for one year is 46.31.

The supply-chain based technology and service provider posted net revenues of RMB 951.6 billion (US$149.3 billion) for the fiscal year ended December 31, 2021, an increase of 27.6% over the previous fiscal year. It incurred a net loss attributable to ordinary shareholders of RMB 3.6 billion (US$0.6 billion) compared to a net income of RMB 49.4 billion in FY 2020.

The diluted net loss per ADS for the fiscal year 2021 was RMB 2.29 (US$0.36) versus diluted net income per ADS of RMB 31.68 for FY 2020.

This stock traded in the range of US$92.69 to US$41.56 in the last 52 weeks.  

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NetEase, Inc. (NASDAQ: NTES)

Market Capitalization: US$245 billion

The NTES stock was up by 6.80% to US$97.50 at 6:13 am ET on Friday. NetEase is an online services provider in China. Started in 1997 as an internet portal service, its current services include online and mobile games, cloud music, live streaming, online education, media, advertising, email, and e-commerce. The company is headquartered in Hangzhou, China.

This stock traded in the range of US$120.84 to US$68.62 in one year and closed at US$91.29 on April 28 with a 2.5% gain.

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NTES has a P/E of 23.53 and a forward P/E for one year of 23.71. At a dividend yield of 1.81%, its annualized dividend is US$1.61.

For the fiscal year ended December 31, 2021, its net revenues were RMB 87,606.0 million (US$13,747.3 million) compared to RMB 73,667.1 million for the fiscal year 2020. The net income attributable to the shareholders totaled to be RMB 16,856.8 million (US$2,645.2 million) compared to RMB 12,062.8 million for the fiscal year 2020.

The company reported net income of US$0.80 per share (US$3.98 per ADS) for the fiscal year 2021 compared to US$0.57 per share (US$2.86 per ADS) for FY 2020. 

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iQIYI, Inc. (NASDAQ: IQ)

Market Capitalization: US$2.88 billion

Beijing-based iQIUI is an online entertainment service provider. Its services include internet video, online games, online literature, live broadcasting, animations, e-commerce, and social media platforms. iQIYI Inc. stock was up by 12.57% to US$3.76 at 6:13 am ET.

The company reported revenue of RMB 30.6 billion (US$4.8 billion) in the fiscal year ended December 31, 2021, a 3% increase from the previous year. The net loss attributable to iQIYI was RMB 6.2 billion (US$968.1 million) compared to a net loss attributable to the company of RMB 7.0 billion in FY 2020.

The IQ stock closed at US$3.34 on April 28. It traded in the range of US$16.12 to US$1.86 in one year. 

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Weibo Corporation (NASDAQ: WB)

Market Capitalization: US$5.03 billion

Weibo is a social media platform in China. It is based in Beijing. Its stock rose 8.42% to US$23.04 at 6:14 am ET in the pre-market.

The stock closed at US$21.25 on April 28 with a 1.43% gain and has a P/E of 11.49 and a forward P/E for one year of 8.62.

For the fiscal year ended December 31, 2021, its net revenues were US$2.26 billion, an increase of 34% YoY compared to US$1.69 billion in fiscal 2020. The company’s income from operations was US$697.4 million. 

Its net income attributable to the company came in at US$428.3 million or US$1.86 per diluted share compared to US$313.4 million or US1.38 per diluted share for FY 2020. 

This stock traded in the range of US$64.70 to US$18.62 in the last 52 weeks. 

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Bottom line:

During the morning trading session, Chinese stocks were up in the US and Hongkong. The Hang Seng Tech Index rose around 10%. However, the volatility in the market may continue until the authorities announce their new monetary policy guidelines. 


 


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