Wall Street Favorites: 3 Chinese Stocks With Strong Buy Ratings for June 2024

Economic Overview - China's economy is experiencing an uneven recovery post-pandemic, with concerns about deflation similar to Japan's in the 1990s, although consumer prices have remained above deflation levels, with a modest 0.3% increase in the consumer price index in May 2023 [1] - The producer price index has shown easing declines, and strong export sectors, particularly electric vehicles, have supported the economy, with exports in April and May exceeding economists' expectations [1][2] BYD (BYDDY) - BYD has emerged as a dominant player in China's electric vehicle market, with sales increasing 46% year-over-year in Q1 2024, totaling 301,631 units [3] - In April and May, BYD's sales continued to show robust growth, with a 48.9% increase in April (312,048 units) and a 38.1% increase in May (331,817 units) compared to the same months in 2023 [3][4] - A newly announced hybrid vehicle with a range of 2,000 kilometers on a single charge is expected to be a significant growth catalyst for BYD [4] - Wall Street analysts are optimistic about BYD, with six "strong buy" ratings and 22 "buy" ratings from 30 firms covering the company [4] Alibaba (BABA) - Alibaba's share price has decreased by 51.8% over the past five years due to regulatory crackdowns and the slow recovery from the "zero-Covid" policy, impacting its e-commerce growth [6] - The company announced a split into six separate business units to enhance operational efficiency and has increased its share buyback program by $25 billion to boost investor confidence [6] - Revenue from Alibaba's core e-commerce businesses, Taobao and Tmall, rose 4% year-over-year at the end of Q1 2024, indicating a recovery trend [7] - Among 44 Wall Street firms covering Alibaba, seven have given it a "strong buy" rating, while 30 have rated it a "buy" [7] Baidu (BIDU) - Baidu's share price has declined by 20.5% over the past five years, but there is growing optimism among Wall Street analysts, with seven "strong buy" ratings and 24 "buy" ratings [8] - The company is focusing on artificial intelligence as a new growth vertical, having invested significantly in R&D over the past decade [8] - Baidu's Q1 2024 earnings results were mixed, missing revenue estimates but beating EPS expectations, with a 6% year-over-year increase in revenue from its AI Cloud unit [8][9] - Baidu's shares are trading at a low valuation of 8.3x forward earnings, making it appear as a "strong buy" opportunity [9]