In this article we will take a look at the 10 best Asian stocks to buy now. You can skip our detailed analysis of these companies, and go directly to the 5 Best Asian Stocks to Buy Now.
Asia is gaining investors’ attention amid its explosive growth potential on the back of human capital, high-growth companies, soaring GDPs, and a massive digital shift. China is a clear leader in the continent, home to major companies like Baidu, Inc. , Alibaba Group Holding Limited , Bilibili Inc. , and Pinduoduo Inc. .
Along with technology, e-commerce also remains the driving force behind the Asian stock market. According to a report, the Asian e-commerce market is expected to grow at a CAGR of 18% by 2025. The region is also the leader in online sales, accounting for 59% of the global online retail sales in 2020. Companies like Alibaba Group Holding Limited , JD.com, Inc. , and Vipshop Holdings Limited are some of the biggest names in the e-commerce sector in Asia. Alibaba Group Holding Limited is one of the best Asian stocks to buy now, with share price soaring by 172% in the past five years. The company’s online presence also resonates with the investors, as it owns two of the most famous Chinese websites for online shopping: Tmall.com and Taobao.com.
Baidu, Inc. is the leading artificial intelligence company based in China, with the stock price soaring over 67% in the past year. The company dominates 80% of China’s search market. Similarly, Pinduoduo Inc. reached a market cap of $152 billion in just 6 years. The company’s stock has also grown by 395% during this time.
China is the leader in the e-commerce market because the sector in China accounts for nearly half of the global e-commerce sales. JD.com, Inc. is an important name for investors, with its stock growing by 17.9% in the past year. South Korean company Coupang, Inc. is a new name in the e-commerce sector. The company had a promising IPO in March 2021, raising over $4.6 billion.
Another Asian stock that is gaining the attention of investors is Sea Limited , which is experiencing continuous growth especially in Southeast Asia and Latin America. The company managed to increase its market capitalization by 41.8% at $142 billion in 2021. It operates in high-growth business areas like gaming, payments, and ecommerce.
But investing is becoming difficult by the day, even for the smart money. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
In light of this, let’s analyze the best Asian stocks to buy now. We took into account hedge fund sentiment, analysts’ ratings, future growth catalysts, and fundamentals while choosing these stocks.
Best Asian Stocks to Buy Now, July 2021:
Number of Hedge Fund Holders: 54
Vipshop Holdings Limited stands tenth on our list of the best Asian stocks to buy now. In Q1 2021, the company reported a revenue of $4.4 billion, increasing 51% during the same period last year.
The VIPS stock’s performance is gaining attention from the investors. Though the stock price has declined 26.2% year to date, it has returned 16.2% to its shareholders in the past year. Also, in 2020, the shares of Vipshop Holdings Limited soared by 10%.
As of Q1 2021, 54 hedge funds tracked by Insider Monkey hold stakes in Vipshop Holdings Limited . The number has increased from 27 funds in the previous quarter.
9. Baidu, Inc.
Number of Hedge Fund Holders: 89
Baidu, Inc. is the leading technology company in China specializing in artificial intelligence. It is one of the largest technology companies in the world with a market cap of $64.7 billion. In Q1 2021, Baidu, Inc.’s revenue stood at $4.3 billion, compared with $3.5 billion during the same period last year. The revenue is expected to grow by 2% in 2021.
Baidu, Inc. is one of the best Asian stocks to buy now. In February 2021, the stock reached its all-time high of $339.9 per share. The company has returned 54.6% to its shareholders in the past year. Baidu, Inc. has announced its partnership with BAIC Group to launch a driverless Apollo Robotaxi at an affordable price. Moreover, due to its growing cloud business, Baidu, Inc. has remained the top internet pick for Mizuho and expects potential growth in cloud business in Q2.
According to Insider Monkey’s database, hedge funds are turning bullish on Baidu, Inc. . As of Q1 2021, 89 hedge funds have stakes in Baidu, Inc. , compared with 51 funds in the quarter earlier. The total value of these stakes is $6.5 billion.
Like Vipshop Holdings Limited , NetEase, Inc. , and NIO Inc. , Baidu, Inc. is one of the best Asian Stocks to buy now.
An investment management firm, Horos Asset Management, released its first-quarter 2021 investor letter and mentioned Baidu, Inc. . Here is what the firm has to say:
“We have also fully exited our stake in Baidu, following their outstanding performance during the period and their lower relative upside potential compared to other investment alternatives, which we will discuss below.
The Chinese technology platform company Baidu has also been held in the portfolios managed by Alejandro, Miguel and myself for several years. During this period, we have seen very high volatility in its share price, which we have taken advantage of to make significant rebalancing moves in our position (in fact, we even sold our entire position once, when we thought the stock’s upside potential was exhausted). After several years of instability, market sentiment turned very positive, putting an end to the historical advertising problems in the healthcare sector, the divestments in O2O (Online-to-Offline) businesses that continued to weigh on the company’s margins, the IPO of part of the iQiyi streaming business (which hid Baidu’s underlying cash generation capacity) and the tough competition from other industry giants such as Tencent and Alibaba, as well as the entry of new players with disruptive business models (ByteDance). At the same time, the company’s recent commitment to electric vehicles contributed even more to this change of narrative. Baidu’s share price rose almost fourfold from the March 2020 lows to all-time highs and reached a valuation where the margin of safety, in our view, was too narrow.”
Number of Hedge Fund Holders: 53
Bilibili Inc. is a Chinese video-sharing site mainly focused on comics, games, and animation. The website is gaining fame among the audience with monthly active users growing by 59% in the past year. It is one of the best Asian stocks to buy now, growing 191% in the past year.
In Q1 2021, Bilibili Inc. generated a revenue of nearly $609 million, up from $361 million during the same period last year. With this current pace, the revenue is expected to increase by 27.3% next year. The company’s mobile games sector accounted for 33% of its revenue in 2020. The stock has returned 193% to its shareholders in 2020. The average number of monthly active users has also increased by 30% at 223 million, with mobile MAUs standing at 208 million. Due to the strong quarter and solid customer base, Credit Suisse upgraded Bilibili Inc. from ‘Neutral’ to ‘Outperform’ in April.
As of Q1 2021, 53 hedge funds tracked by Insider Monkey own stakes in Bilibili Inc. , up from 46 funds in the previous quarter.
Tao Value, an investment management firm, released its Q4 2020 investor letter and mentioned a few stocks, including Bilibili Inc. . Here is what the firm has to say:
“Bilibili (ticker: BILI) similarly reported a blast Q3 2020. Bilibili reached an average MAU of 197m with a high 7.6% pay ratio, showing strong user growth and high engagement. Additionally, the high margin advertisement segment showed an exceptionally strong trend, growing 126% yoy. Though surprising to many, I think it is a natural outcome of building an ever-more valuable user generated contents platform. If it is not by ads, I believe these values created by Bilibili will accrue to it in other ways. One interesting data point is that management mentioned the average age of new cohorts are still around 20, indicating it is still in its early stage of a long growth runway. I am happy to see this position played out like how I envisioned in original thesis and will be excited to continue to follow its progress.”
Number of Hedge Fund Holders: 32
NetEase, Inc. is seventh on our list of the best Asian stocks to buy now. It is an internet technology company based in China that specializes in communication and commerce. It is one of the fastest-growing companies in China with a market cap of $76 billion.
NetEase, Inc. generated over $3.2 billion in revenues in Q1 2021, compared with $2.6 billion during the same period last year, showing 30% year-over-year growth. The stock has gained 34% in the past year and 29.4% in the past six months. The online game sector saw a growth of 11%, generating $2.3 billion. The company’s search engine Youdao saw a 148% growth in sales at $204 million. The annual dividend of NetEase, Inc. stands at $1.19 per share, with a dividend yield of 1.04%.
At the end of Q1 2021, 32 hedge funds have stakes in NetEase, Inc. , worth $3.5 billion.
Like Pinduoduo Inc. , Sea Limited , Alibaba Group Holding Limited , JD.com, Inc. , Bilibili Inc. , Vipshop Holdings Limited and Baidu, Inc. , NetEase, Inc. is one of the best Asian stocks to buy now.
6. NIO Inc.
Number of Hedge Fund Holders: 28
NIO Inc. stands fifth on our list of the best Asian stocks to buy now. The automobile company is based in China and specializes in electric vehicles. It has a solid customer base in Germany, the United Kingdom, and the U.S.
In its Q1 2021 report, NIO Inc. stated revenue of over $2.1 billion, compared with $214 million during the same period last year. The company sold over 7,000 vehicles in April 2021. Earlier in June, Citigroup ranked the NIO stock as a ‘Buy’ because of the strong demand for EVs. The stock has also gained 567% in the past year.
28 hedge funds, tracked by Insider Monkey, have stakes in NIO Inc. at the end of Q1 2021. The total value of these stakes is $1.32 billion.
Like Pinduoduo Inc. , Sea Limited , Alibaba Group Holding Limited , JD.com, Inc. , Bilibili Inc. , Vipshop Holdings Limited and Baidu, Inc. , NIO Inc. is one of the best Asian stocks to buy now.
5. Sea Limited
Number of Hedge Fund Holders: 98
Sea Limited is a Singaporean internet company, mainly operating in gaming, digital payments, and e-commerce. The company owns Garena, a global online games developer. In its Q1 2021 reports, Sea Limited announced a 146.7% year-on-year growth in its revenue at $1.8 billion. The digital sector of the company generated over $781.3 million in revenues, showing 111.4% growth year-on-year.
The BofA has rated the SE stock as a ‘Buy’, raising the target price to $340 from $260.
As of Q1 2021, 98 hedge funds, tracked in our database, own stakes in Sea Limited , worth $10.4 billion.
ClearBridge Investments recently published its Q1 2021 investor letter and mentions Sea Limited in it. Here is what the investment management firm has to say:
“Singapore-based Sea maintains leading positions in Southeast Asia in video games and e-commerce and operates an emerging digital payments and banking business. While the company is investing heavily into e-commerce and payments, this growth is being funded by its highly profitable gaming segment. We see a long runway for growth across Sea’s businesses with multiple opportunities like e-commerce expansion in Latin America not fully factored into the valuation today. The company also has a well-respected management team that has successfully executed in expanding its total addressable market. Along with existing holding Alibaba, Sea provides exposure to secular growth trends in emerging markets that are harder to replicate through U.S. stocks.”
Number of Hedge Fund Holders: 56
Founded in 2015, Pinduoduo Inc. is an agriculture-centric technology company in China. Even in such a short time, the company has become one of the fastest-growing retailers in China with a market cap of $152 billion. In Q1 2021, it generated over $3.4 billion in revenues, compared with $1.02 billion during the same period last year. The analysts are expecting an 80% year-over-year growth in revenue in 2021.
At the end of Q1 2021, 56 hedge funds have stakes in Pinduoduo Inc. , up from 54 funds in the previous quarter.
Tao Value, an investment management firm, published its first-quarter 2021 investor letter. The firm has mentioned Pinduoduo Inc. in its letter. Here is what it has to say:
“Pinduoduo reported a strong quarter, reporting MAU of 720 million, now surpassing Taobao. However, it was overshadowed by a bigger news on Colin Huang resigning from Board and completely disassociating himself from PDD’s management & operation. Huang explained in his letter to shareholders that he would start fundamental research initiatives in food science. Although not entirely shocked (as he already stepped down from CEO July 2020), I am surprised by the fast pace of such transition. I remain confident in the organization and the culture Huang built but will monitor it closely.”
3. JD.com, Inc.
Number of Hedge Fund Holders: 75
JD.com, Inc. stands third on our list of the best Asian stocks to buy now. It is one of the largest e-commerce companies in China and a Fortune Global 500 company.
In Q1 2021, JD.com, Inc. generated a revenue of over 203 billion CNY, up from 146.2 billion CNY during the same period last year. The stock price is also growing after seeing a low of $39 in March 2020. In February this year, the JD stock reached its all-time high and traded for $106 per share. Overall, JD.com, Inc. stock has grown by 254.8% in the last 5 years.
As of Q1 2021, 75 hedge funds tracked in our database have a stake in JD.com, Inc. . The total value of these stakes is $11.3 billion.
An investment management firm, Arisaig Partners, published its Q1 2021 investor letter and mentioned JD.com, Inc. in it. Here is what the firm has to say:
“Our largest holding as a firm, JD.com, we expect to grow earnings at an annualized rate of 30% over the next five years, implying it will trade on an EV / EBITDA of 7.5x at the end of this period. Is this a growth stock or a value stock? Does anyone care? Do these labels really matter?
For the Asia Fund, with a higher pre-existing allocation to our core FMCG holdings coming into the year, we took advantage of capital market volatility to further concentrate on our highest conviction names. JD.com has been the main destination for our limited reallocations as evidence continues to emerge supporting our thesis that the company has a strong right-to-win in the large and highly fragmented USD1.8th Chinese grocery market. We have also been encouraged by the fact that after years of persistence, the company is beginning to engage with us on ESG issues (we have specifically discussed data protection, climate change and the circular economy). ESG is now being considered at the board level, and specific sustainability reporting should follow in the coming months. Having long displayed a healthy obsession with customer service, we interpret these latest conversations as a sign that JD is beginning to develop a more sophisticated understanding of its impact on all stakeholders.”
2. Coupang, Inc.
Number of Hedge Fund Holders: 40
Coupang, Inc. is an e-commerce company based in Seoul, South Korea. It is one of the best Asian stocks to buy now because the e-commerce market is rapidly growing in South Korea and is expected to reach $325 billion in 2025. Coupang, Inc. is an Asian substitute for the American e-commerce giant, Amazon.com, inc. (NASDAQ: AMZN), having nearly 24% of South Korea’s e-commerce market share.
Coupang, Inc. generated nearly $12 billion in revenues in 2020, up from $6.2 billion in 2019. The company also managed to reduce its operating loss for the year to $500 million, from $600 million in 2019. Moreover, the CPNG stock has also grown by 9.4% in the past month. Coupang, Inc. is trying to get a hold of the international market as well, by expanding its operations to Malaysia, after Japan and Tokyo. Earlier in May, The Bill and Melinda Gates Foundation sold all its stakes in Apple Inc. (NASDAQ: AAPL) and Twitter, Inc. (NYSE: TWTR) and started building its position in Coupang, Inc. with 5.7 million shares, worth $220 million.
As of the end of Q1 2021, 40 hedge funds tracked by Insider Monkey hold stakes in Coupang, Inc. , worth $21.6 billion.
Number of Hedge Fund Holders: 135
Alibaba Group Holding Limited tops our list of the best Asian stocks to buy now. It is a multinational technology and e-commerce company based in China.
Alibaba Group Holding Limited reported revenue of 187 billion CNY in Q1 2021, compared with 114 billion CNY during the same period last year. The stock is also bouncing back after being hit by the Covid-19 pandemic. The share prices have gained 1.4% in the past month. On April 12, the BABA stock grew by over 9% with a share price of $244. This was recorded as the best performance of the stock since mid-October 2020 when it saw its all-time high, with $309.9 per share.
Investors have their eyes on Alibaba Group Holding Limited stock because of the growth it is projecting. According to the analysts, the revenues are expected to grow by 39% this year.
As of Q1 2021, 135 hedge funds own positions in Alibaba Group Holding Limited , worth $15.4 billion.
Author: Vardah Gill, Insider Monkey