Investment analysts have upgraded at least three US-listed Chinese stocks to buy so far this month. This positive outlook comes at a time when many Chinese companies are announcing their profits for the last three months of 2023 and the entire year. While many analysts doubt China's ability to achieve its “about 5%” growth target for 2024 without further stimulus, the country reported better-than-expected economic data in retail sales, industrial production and investment in fixed assets for the first two months of the year. year. Here are the Chinese stocks that analysts are bullish on: Tencent Music Entertainment – Citi upgraded the stock to buy on Wednesday with a price target of $13 per share, up about 18% from Tuesday's close. The company operates one of China's main alternatives to Spotify. TME's fourth-quarter results beat expectations, helped by “outperforming online music” revenues, the Citi report said. “We believe TME's fixed/flexible subscription music business while expanding music value chain capabilities and ramping up long and diverse audio use case scenarios across multiple channels/multi-devices will support [a] “Sustainable growth expectations,” the analysts added. Kingsoft Cloud – JPMorgan on March 10 upgraded the cloud services company to overweight, but cut its price target by 30 cents to $4.20 per share based on expectations of lower revenues. That's still about 30% above where Kingsoft Cloud shares closed on Tuesday, and JPMorgan expects the company to break even in the first quarter on an EBITDA basis, and break even throughout 2024 — the first time ever. Analysts noted that it is contrary to the consensus view on an EBITDA loss, and their bullish case is based on revenue shifting to higher margin sources such as Kingsoft's fast-growing AI business, as well as lower costs due to writing assets. Vnet Group – BofA on Tuesday upgraded shares of the data center operator to buy with a price target of $2.70, down from $3.90 previously but still more than 35% higher than where shares closed on Tuesday. Analysts expect news of a local government contract and demand from short video companies to boost VNET revenues in the coming years. The company already operates data centers in more than 20 cities in China, according to the report. Analysts are also finding more reasons to turn increasingly optimistic about other Chinese stocks. Earlier this month, on March 10, JPMorgan upgraded shares of video streaming and gaming company Bilibili to Neutral, from Underweight, with a price target of $11, just below the stock's closing price on Tuesday. Analysts expect Bilibili to be able to reach its double-digit revenue growth target for this year with the help of new game releases. They also noted that the company had two quarters of positive operating cash flow in 2023. “With these catalysts, we believe the downside in stock prices will be limited over the next three to six months,” the report said. On March 8, Deutsche Bank analysts began coverage of China's auto sector with five buy-rated stocks: Great Wall Motor, BYD, Sirius, Li Auto and GMC. Li Auto is only listed in the US – with Michael Bloom reporting
