This video offers an in-depth analysis of several top Chinese stocks with remaining growth potential, despite a strong performance by the Hang Seng Index and Shanghai Composite earlier in the year. The host outlines a "big picture" investment process, combining technical analysis of the broader Chinese market (using the 50-day moving average) with fundamental discounted cash flow (DCF) valuations for individual companies. Specific stocks examined include Trip.com (TCOM), JD.com (JD), New Oriental (EDU), BYD, and Alibaba (BABA). The analysis highlights industry-specific drivers like China's robust travel sector, the impact and potential resolution of price wars in e-commerce, and BYD's domestic dominance and international expansion. While acknowledging a bullish long-term trend, the video advises caution for the near term and identifies strategic buying opportunities during market pullbacks. The host also introduces the VM Open Note headset, a sponsor product, and extensively promotes his free and premium Discord communities, offering comprehensive resources and educational content for investors and traders.
Top China Stocks with Upside Potential
0:02 China Market Performance & Outlook: The Hang Seng Index (HSI) and Shanghai Composite are both up approximately 25% year-to-date. While caution is advised for the fourth quarter due to these gains, the long-term trend remains bullish towards 2026. The 50-day moving average is a key indicator: above it, dips are bought; below it, rallies are sold. The HSI is nearing its forecasted late 2025 target of 25,000-26,000.
0:33 Trip.com (TCOM) Analysis: The host "structurally likes" Trip.com due to the robust Chinese travel and entertainment industry. Valuations are reasonable, and the stock is technically strong, trading above its 50-day moving average. Based on DCF models and future free cash flow, a target of high $60s to low $70s is anticipated. Pullbacks to the high $50s/low $60s are considered viable buying opportunities.
0:21 JD.com (JD) Analysis: JD is currently in a price war with competitors like Meituan, impacting margins and free cash flow. However, government intervention is expected to curb aggressive discounting, leading to margin recovery over multiple quarters. The DCF model conservatively values JD at a minimum of $35/share, with a target of $38-$40/share next year. The declining 50-day moving average is lowering the threshold for a technical pivot (currently 9% from $32), making it an attractive long-term value play despite current chart appearance.
0:44 VM Open Note Headset (Sponsor Segment): The VM Open Note headset can instantly record meetings and calls, translate and transcribe live in up to 16 languages. It's presented as a tool for efficient global research, allowing users to understand foreign content (e.g., Chinese financial videos) with real-time translation and transcription, providing an "edge" for identifying global market trends.
11:35 New Oriental (EDU) Analysis: The host holds a small position in EDU, valuing it at $50-$55/share based on historical ranges and margin expectations. A long-term (18-24 months) target of reclaiming $60/share (30% upside) is considered highly probable.
13:23 BYD Analysis: BYD is highly favored due to its widespread popularity in mainland China and growing international sales. A key catalyst for BYD's substantial potential is its ability to sell into Europe without significant tariffs. After a "massive upside sequence" earlier in the year, BYD is in a corrective period. The DCF model suggests a value of $125-$128/share (conservative) or $135+ (bull case), with 15-20% returns possible into 2026.
16:50 Alibaba (BABA) Analysis: The host plans to buy Alibaba if it returns to the low to mid $110s, which is near its bare-case valuation. Alibaba's outlook in AI, cloud, and e-commerce is robust. A fair value under a stressed scenario is at least $130, with a bull case of $145-$150 (another 20% upside).
18:25 Discord Community Invitation: The host invites viewers to join his free Discord channel and outlines benefits of his premium community, which includes daily pre-market notes, upcoming trading ideas, an equity positioning dashboard (showing his own US/China exposure), full DCF models, execution education, a journal of backtested statistics, and financial modeling education.
22:22 Limited Premium Membership: Premium Discord membership is limited each month to ensure the host can personally answer all questions. He advises viewers to start with the free version and follow his work before considering a premium subscription.