Top Chinese Companies on NASDAQ
In this article, we discuss the top Chinese companies on NASDAQ. If you want to skip our detailed analysis of these companies, go directly to the Top 5 Chinese Companies on NASDAQ.
Chinese companies have taken the American stock market by storm in recent years as Beijing gradually opens up to investments from the outside world. According to data from the US-China Economic and Security Review Commission, there are close to 250 Chinese companies that are listed in the United States. These firms have a total market capitalization of over $2 trillion. Eight state-owned Chinese entities are also publicly traded in the US. The most active Chinese stocks are in the growth sector, mostly comprising firms listed on the NASDAQ exchange.
For example, Baidu, Inc. (NASDAQ: BIDU), the Beijing-based technology company, is one of the best American Depositary Receipt (ADR) stocks on the market today. Baidu, Inc. (NASDAQ: BIDU) has strong business fundamentals and recently sought approval for a listing on the stock exchange in Hong Kong. The company has also been leveraging capabilities in the artificial intelligence sector to help other businesses develop, signing an agreement with China Huaneng Group in early March to digitize the energy and power industry.
Another Chinese stock with explosive growth potential is JD.com, Inc. (NASDAQ: JD), the Beijing-based ecommerce company that has taken on rival Alibaba Group Holding Limited (NYSE: BABA) for the title of the largest online marketplace in China. JD.com, Inc. (NASDAQ: JD) recently crushed market expectations on earnings per share and revenue for the first quarter of 2021, reporting that annual active customer accounts on the platform had increased 29% year-on-year to almost 500 million. As China gears up for a massive shopping festival, the stock has a lot of room to climb higher along with Alibaba Group Holding Limited (NYSE: BABA).
In the hullabaloo around retail giants like Alibaba Group Holding Limited (NYSE: BABA) and JD.com, Inc. (NASDAQ: JD), Pinduoduo Inc. (NASDAQ: PDD), the Shanghai-based online seller that prioritizes the marketing of agricultural produce, has quietly established itself in the Chinese technology industry over the past few years. Pinduoduo Inc. (NASDAQ: PDD) posted over $3.3 billion in revenue for the first quarter of 2021, up 266% year-on-year and smashing market estimates by $180 million. On May 26, the company reported that active buyers on the platform had crossed 823 million in March 2021.
As internet penetration and mass adoption of digital offerings soar, these stocks will climb higher in the coming weeks and months as the reach Chinese firms expands beyond the Asian country, rivaling the business of American counterparts in this regard. This will likely cause a sea-shift in global power dynamics, adding to the market uncertainty that dominated headlines in recent weeks. 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.
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With this context in mind, here is our list of the top Chinese companies on NASDAQ. These firms are the some of the biggest Chinese firms on the market in terms of market capitalization and have strong business fundamentals, making it likely that the stocks will soar in the coming weeks and months as business activities resume following the worst of the coronavirus crisis.
Top Chinese Companies on NASDAQ
10. Canaan Inc. (NASDAQ: CAN)
Number of Hedge Fund Holders: 9
Canaan Inc. (NASDAQ: CAN) is a firm looking to cash in on the cryptocurrency craze sweeping the world. It makes and sells computer hardware specially designed for mining of crypto coins like Bitcoin. The firm engages in artificial intelligence and data center operations as well. On June 1, Canaan Inc. (NASDAQ: CAN) soared 10% after the firm reported a 538% year-on-year increase in revenue, primarily driven by growth in overseas markets amid a crackdown against Bitcoin-related firms in China.
Canaan Inc. (NASDAQ: CAN) stock has returned more than 413% to investors over the past twelve months, outshining other growth stocks by a long margin. In April, Canaan Inc. (NASDAQ: CAN) signed a $93 million deal with Genesis Digital Assets for delivery of AvalonMiner machines. It is ranked tenth on our list of top Chinese companies on NASDAQ.
At the end of the first quarter of 2021, 9 hedge funds in the database of Insider Monkey held stakes worth $47 million in Canaan Inc. (NASDAQ: CAN), up from 4 the preceding quarter worth $3.8 million.
Just like Baidu, Inc. (NASDAQ: BIDU), JD.com, Inc. (NASDAQ: JD), and Pinduoduo Inc. (NASDAQ: PDD), Canaan Inc. (NASDAQ: CAN) is one of the top Chinese companies on NASDAQ.
9. 360 DigiTech, Inc. (NASDAQ: QFIN)
Number of Hedge Fund Holders: 19
360 DigiTech, Inc. (NASDAQ: QFIN) is a digital finance platform that has grown over the past few years as the financial technology revolution fundamentally alters consumer behavior. Some of the services the company provides include incremental credit assessment, collection, and guarantee for defaulted loans, among others. However, the earnings results of the firm for the first quarter of 2032 have been less than satisfactory, missing market expectations on revenue by over $7 million.
360 DigiTech, Inc. (NASDAQ: QFIN) stock has offered investors exceeding 310% over the course of the past twelve months. 360 DigiTech, Inc. (NASDAQ: QFIN) has outperformed the wider market in the past year and has a three year revenue growth rate of more than 500%. It is placed ninth on our list of top Chinese companies on NASDAQ.
Out of the hedge funds being tracked by Insider Monkey, London-based investment firm GLG Partners is a leading shareholder in 360 DigiTech, Inc. (NASDAQ: QFIN) with 964,858 shares worth more than $25 million.
Just like Baidu, Inc. (NASDAQ: BIDU), JD.com, Inc. (NASDAQ: JD), and Pinduoduo Inc. (NASDAQ: PDD), 360 DigiTech, Inc. (NASDAQ: QFIN) is one of the top Chinese companies on NASDAQ.
8. Adagene Inc. (NASDAQ: ADAG)
Number of Hedge Fund Holders: 10
Adagene Inc. (NASDAQ: ADAG) is a biopharma company working on monoclonal antibody drugs for cancers. 2020 was a bull year for biotechnology stocks as many piled onto them in the hopes of riding the COVID-19 vaccine wave. However, as the pandemic subsides, it is important for investors to place their bets carefully in the biotech sector. Adagene is a good option in this regard, with the company smashing market predictions on earnings per share in the past fiscal year by $0.20.
Adagene Inc. (NASDAQ: ADAG) stock has returned more than 7% to investors in the past month. On May 19, the company announced the results of Phase 1 trial of a drug for solid tumors, outlining that the product has a favorable safety profile and had demonstrated promising clinical efficacy.
At the end of the first quarter of 2021, 10 hedge funds in the database of Insider Monkey held stakes worth $18.8 million in Adagene Inc. (NASDAQ: ADAG).
Just like Baidu, Inc. (NASDAQ: BIDU), JD.com, Inc. (NASDAQ: JD), and Pinduoduo Inc. (NASDAQ: PDD), Adagene Inc. (NASDAQ: ADAG) is one of the top Chinese companies on NASDAQ.
7. 51job, Inc. (NASDAQ: JOBS)
Number of Hedge Fund Holders: 18
51job, Inc. (NASDAQ: JOBS) provides online human resource services. The stock has a lot of room to run this year as the economy reopens following the coronavirus pandemic and businesses go on hiring sprees to get themselves back in the game. The firm crushed market estimates on revenue and earnings per share for the third quarter of 2020 and has recently received a non-binding proposal to go private at more than $79 per share. The shares of the firm have jumped 15% in the past few weeks.
51job, Inc. (NASDAQ: JOBS) stock has returned more than 16% to investors over the past three months. Some of the platforms it owns include 51job.com, yingjiesheng.com, 51jingying.com, lagou.com, and 51mdd.com, among others.
Out of the hedge funds being tracked by Insider Monkey, Naples-based investment firm Pentwater Capital Management is a leading shareholder in the firm with 702,272 shares worth close to $43 million.
Just like Baidu, Inc. (NASDAQ: BIDU), JD.com, Inc. (NASDAQ: JD), and Pinduoduo Inc. (NASDAQ: PDD), 51job, Inc. (NASDAQ: JOBS) is one of the top Chinese companies on NASDAQ.
6. GDS Holdings Limited (NASDAQ: GDS)
Number of Hedge Fund Holders: 40
GDS Holdings Limited (NASDAQ: GDS) is a company that builds, maintains, and operates data centers for other businesses, mostly in China. As a result of the coronavirus lockdowns, data centers have become a huge digital commodity, with many firms looking to shift their operations to the internet, an undertaking that is usually built on data centers. GDS stock has surged over the past year on the back of these developments. GDS is different from other data center companies because it offers carrier and cloud-neutral services.
GDS Holdings Limited (NASDAQ: GDS) crushed market expectations on earnings per share for the first quarter of 2021. The company’s shares have offered investors returns exceeding 6% over the course of the past twelve months. The firm is placed sixth on our list of top Chinese companies on NASDAQ.
At the end of the first quarter of 2021, 40 hedge funds in the database of Insider Monkey held stakes worth $2 billion in GDS Holdings Limited (NASDAQ: GDS), up from 39 in the previous quarter worth $2.8 billion.
Just like Alibaba Group Holding Limited (NYSE: BABA), Baidu, Inc. (NASDAQ: BIDU), JD.com, Inc. (NASDAQ: JD) and Pinduoduo Inc. (NASDAQ: PDD), GDS Holdings Limited (NASDAQ: GDS) is one of the best Chinese stocks to buy now.
In its Q1 2020 investor letter, Baron Asset Fund, an asset management firm, highlighted a few stocks and GDS Holdings Limited (NASDAQ: GDS) was one of them. Here is what the fund said:
“In the most recent quarter, we acquired shares of GDS Holdings Limited, the leading data center developer and operator in China serving the premier Chinese cloud service, e-commerce, social media/gaming, and internet players. Although we have not invested in many foreign-based companies, we believe that GDS represents a compelling opportunity. Its business shares many similarities with Equinix, Inc., a U.S.- based data center operator that has been a profitable long-term investment for the Fund. In addition, our real estate research team has met extensively with GDS management over the course of the last few years and has built increased confidence in the team’s growth aspirations and its ability to successfully execute them.
We believe that the Chinese data center industry remains in the earlier stages of its growth curve, and we believe it will experience one of the fastest multi-year growth rates globally as the Chinese government continues to support the rapid rollout of 5G connectivity. GDS’s current and future data centers support the critical IT infrastructure that empowers cloud adoption and enables numerous consumer and business applications. In addition to experiencing robust organic growth, GDS has accelerated its growth runway through select M&A. These acquisitions have allowed the company to obtain additional capacity in supply constrained markets at attractive prices. In addition, GDS has supplemented its dense urban strategy with a “campus strategy,” whereby it secures additional supplies of land and power on the outskirts of cities with minimal capital committed.
To provide some perspective on GDS’s growth rate, it signs more “bookings” in a single quarter than many global data center companies sign over the course of a year. Lastly, after two well received capital raises in 2019, GDS remains well funded with ample cash on its balance sheet to support multiple years of accelerated growth. GDS also has several deep-pocketed backers, including the Singaporean government’s investment fund, that have remained supportive of GDS’s growth plans and have participated in several of GDS’s capital raises. We believe there are many similarities to our other data center investments–GDS is earlier on its growth curve but growing at a much faster clip. We see a path for GDS to nearly triple its cash flow over the next few years, and we see a path to double our investment over that timeframe.”
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Disclose. None. Top Chinese Companies on NASDAQ is originally published on Insider Monkey.
