3 Top Chinese Stocks Recently Upgraded by Wall St. Analysts

The Chinese economy has been recovering faster than the rest of the world, especially with COVID-19 cases soaring in the United States and Europe. Add in the fact that a Joe Biden administration will be much less confrontational and more cooperative with China, there’s reason to believe that many Chinese stocks could see robust gains in the months to come. That’s why I am highlighting three top Chinese stocks that were recently upgraded by analysts…

Wall Street analysts are responsible for covering a select group of stocks. In their coverage, they provide in-depth research on a company’s current financial situation and future prospects. These insights are the basis for their ratings. Analysts use different ratings to evaluate a stock: such as Buy and Sell or Underweight and Overweight. Investors should pay attention to these upgrades and downgrades because they can typically affect a stock’s price.

The following three companies based in China have benefited from current secular trends and viewed favorably by analysts: NIO Inc. (NIO), Alibaba Group Holding Ltd (BABA), and Baidu Inc. (BIDU).

NIO Inc. (NIO)

Considered the “Tesla of China,” this Chinese company is cementing its status in the rapidly growing electric vehicle (EV) industry. The company recently announced a record-breaking 5,000 deliveries in October. NIO has delivered over 31,000 vehicles this year, an 111% increase from the previous year. The company is currently worth more than $65 billion, which is more than both General Motors (GM) and Ford (F).

NIO is seeing rising demand for its ES6 and ES8 models, which is helping to drive revenue. Another growth driver for the company is its new battery system. The company recently announced it would release a 100 kilowatt/hr battery, which will allow it to compete with Tesla (TSLA). The company also offers a Battery as a Service (BaaS) model, a subscription plan for batteries. This allows NIO owners to swap their batteries once they run out of juice.

The stock was recently upgraded, as Rebecca Wen of JP Morgan raised her price target for NIO from $41 to $46, with an “Overweight” rating. She believes NIO will reach a 30 percent market share by 2025, as the company has become a leader in the EV industry and transforming the business model to one that provides services through platforms and content.

The stock is rated a “Strong Buy” in our POWR Ratings system. It holds a grade of “A” in three out of the four components that make up the POWR Ratings, including Trade Grade, Buy & Hold Grade, and Peer Grade. The final component, Industry Rank, has a grade of “B.” The stock is also ranked #3 in the China industry.

Keep a close eye on the stock next week, as it is reporting its latest financial results on November 17th.

Alibaba Group Holding Ltd (BABA)

Moving from the “Tesla of China” to the “Amazon of China,” BABA has seen its stock trending downward this week. This is because ex-CEO and Founder, Jack Ma, criticized the Chinese financial system, which led to a suspension of the ANT Financial IPO. BABA owns 30% of the company, and the IPO was supposed to be the largest on record.

I see this as a short blip, as the company is the e-commerce leader in the most populated country in the world. One of the biggest trends this year has been…

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