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10 Best Asian Stocks to Buy Now

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·11 min read
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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. (NASDAQ: BIDU), Alibaba Group Holding Limited (NYSE: BABA), Bilibili Inc. (NASDAQ: BILI), and Pinduoduo Inc. (NASDAQ: PDD).

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 (NYSE: BABA), JD.com, Inc. (NASDAQ: JD), and Vipshop Holdings Limited (NYSE: VIPS) are some of the biggest names in the e-commerce sector in Asia. Alibaba Group Holding Limited (NYSE: BABA) 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. (NASDAQ: BIDU) 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. (NASDAQ: PDD) 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. (NASDAQ: JD) is an important name for investors, with its stock growing by 17.9% in the past year. South Korean company Coupang, Inc. (NYSE: CPNG) 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 (NYSE: SE), 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.

Best Asian Stocks to Buy Now
Best Asian Stocks to Buy Now

Photo by Markus Winkler on Unsplash

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

10. Vipshop Holdings Limited (NYSE: VIPS)

Number of Hedge Fund Holders: 54

Vipshop Holdings Limited (NYSE: VIPS) 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 (NYSE: VIPS) soared by 10%.

As of Q1 2021, 54 hedge funds tracked by Insider Monkey hold stakes in Vipshop Holdings Limited (NYSE: VIPS). The number has increased from 27 funds in the previous quarter.

9. Baidu, Inc. (NASDAQ: BIDU)

Number of Hedge Fund Holders: 89

Baidu, Inc. (NASDAQ: BIDU) 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 (NASDAQ: BIDU) 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. (NASDAQ: BIDU) 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. (NASDAQ: BIDU) 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. (NASDAQ: BIDU) 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. (NASDAQ: BIDU). As of Q1 2021, 89 hedge funds have stakes in Baidu, Inc. (NASDAQ: BIDU), compared with 51 funds in the quarter earlier. The total value of these stakes is $6.5 billion.

Like Vipshop Holdings Limited (NYSE: VIPS), NetEase, Inc. (NASDAQ: NTES), and NIO Inc. (NYSE: NIO), Baidu, Inc. (NASDAQ: BIDU) 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. (NASDAQ: BIDU). 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.”

8. Bilibili Inc. (NASDAQ: BILI)

Number of Hedge Fund Holders: 53

Bilibili Inc. (NASDAQ: BILI) 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. (NASDAQ: BILI) 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. (NASDAQ: BILI) from 'Neutral' to 'Outperform' in April.

As of Q1 2021, 53 hedge funds tracked by Insider Monkey own stakes in Bilibili Inc. (NASDAQ: BILI), 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. (NASDAQ: BILI). 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.”

7. NetEase, Inc. (NASDAQ: NTES)

Number of Hedge Fund Holders: 32

NetEase, Inc. (NASDAQ: NTES) 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. (NASDAQ: NTES) 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. (NASDAQ: NTES) 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. (NASDAQ: NTES), worth $3.5 billion.

Like Pinduoduo Inc. (NASDAQ: PDD), Sea Limited (NYSE: SE), Alibaba Group Holding Limited (NYSE: BABA), JD.com, Inc. (NASDAQ: JD), Bilibili Inc. (NASDAQ: BILI), Vipshop Holdings Limited (NYSE: VIPS) and Baidu, Inc. (NASDAQ: BIDU), NetEase, Inc. (NASDAQ: NTES) is one of the best Asian stocks to buy now.

6. NIO Inc. (NYSE: NIO)

Number of Hedge Fund Holders: 28

NIO Inc. (NYSE: NIO) 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. (NYSE: NIO) 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. (NYSE: NIO) at the end of Q1 2021. The total value of these stakes is $1.32 billion.

Like Pinduoduo Inc. (NASDAQ: PDD), Sea Limited (NYSE: SE), Alibaba Group Holding Limited (NYSE: BABA), JD.com, Inc. (NASDAQ: JD), Bilibili Inc. (NASDAQ: BILI), Vipshop Holdings Limited (NYSE: VIPS) and Baidu, Inc. (NASDAQ: BIDU), NIO Inc. (NYSE: NIO) is one of the best Asian stocks to buy now.

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Disclosure: None. 10 Best Asian Stocks to Buy Now is originally published on Insider Monkey.