Chinese stocks have been in a strong bearish trend in the past few months. Indeed, the KraneShares China Internet ETF has crashed by over 70% from its highest level this year. This decline has been because of the rising geopolitics between China and the United States and fears that these stocks will be delisted. Here are some of the most undervalued Chinese stocks to diversify your portfolio with.
Alibaba (NYSE: BABA) is a leading Chinese e-commerce company that offers its services globally. The company operates several companies like AliExpress, Taobao, TMall, Lazada, Alimama, and Alibaba Cloud among others.
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The Alibaba stock price has crashed hard in the past few years. It has fallen by more than 70% from its all-time high bringing its total market cap to about $263 billion.
The stock has crashed because of fears of being delisted and the fact that its business in China is under regulatory scrutiny. For example, the valuation of its Ant Financial has moved from over $200 billion to less than $30 billion.
Still, from a valuation standpoint, Alibaba is one of the most undervalued companies today. It is trading at a forward PE of just 11.80, which is significantly small for a company that is still growing. In contrast, Amazon has a forward PE of about 61.
Baidu (NASDAQ: BIDU) is a leading Chinese company that operates the biggest search engine in the country. The company also operates companies in the video streaming and maps industry. It also owns Baidu Ventures, a company that invests in other tech firms. Its portfolio includes companies like AirMap, OpenSpace, and AtomWise among others.
The Baidu stock price has also been in a strong bearish trend lately. It has fallen by more than 60% from its 2021 high, bringing its market cap to about $47 billion. It is one of the cheapest China stocks, with a forward PE of just 16.
Tencent Music Entertainment (NYSE: TME) is a company that offers the best-known music streaming products in China. It is widely compared to Spotify, the streaming giant with millions of users. It is partly owned by Tencent Group, one of the largest conglomerates in China. Its products are QQ Music, Kugou, Kuwo, and WeSing.
The Tencent Music stock price has crashed by over 86% from its all-time high, bringing its market cap to about $7 billion. There is a likelihood that the stock will rebound in the coming months because of its strong growth and strong market share.
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