Chinese Internet Firms are in the Spotlight as Trade Rhetoric Heats Up
There is an ongoing competition between China and the United States for worldwide economic supremacy. One particularly fertile battleground in the competition is technology. Data indicates that the gap in venture capital funding between Chinese and American companies is closing fast. China has used grand ambitions and careful government planning to create powerful, profitable companies uniquely positioned to take advantage of their market – and beyond.
Home to the largest internet and mobile markets in the world, Chinese companies tend to be more transaction-based than their Western counterparts. Many of these companies have become skilled at leveraging rapid adoption rates and a tech-savvy population to sell virtual and physical goods. E-commerce, gaming, and social network businesses are particularly successful – big names include Alibaba, Weibo, and Tencent – but the space is diverse. Some companies, like Huami, create wearable devices; others, like Baidu, traffic in A.I. and internet services (including the largest search engine in China).
While the trade wars and questions about Chinese technology companies’ ability to innovate remain, many economic experts see a positive future, driven in part by the impending arrival of 5G technology. Whether this is the impetus for the next great wave of Chinese tech companies remains to be seen, but its big names are proven successes, making them accessible, enticing options for investors.
In addition to the increased attention due to the barbs being traded between Beijing and Washington, a couple of members of the group are set to report earnings this week. Autohome (NYSE: ATHM) is set to report on June 1 and Baozun (Nasdaq: BZUN) is set to report on June 2. Both companies are expected to see earnings decline slightly compared to last year.
Looking at the fundamental ratings for the companies in the industry, the Tickeron screener shows that NetEase (Nasdaq: NTES) is the highest rated among the 18 stocks in the group. It scores very highly in its Valuation Rating, Profit vs. Risk Rating, and the SMR Rating. It also scores well in the Seasonality Rating. The only area where it is below average is in the PE Growth Rating.
The other four companies in the top five for fundamental ratings are JOYY Inc. (Nasdaq: YY), JD.Com (Nasdaq: JD), Bitauto Holdings (Nasdaq: BITA), and Alibaba (NYSE: BABA).
The technical ratings show three of the same companies in the top five for their various ratings—Alibaba, NetEase, and Bitauto Holdings. The top company for its overall technical ratings is Vipshop Holdings (Nasdaq: VIPS). The stock scores well in its Stochastic indicators, MACD, Momentum, and the Moving Averages. The only area where the stock doesn’t score well is with the AROON indicator. Alibaba scores highly in four out of five as well with its only subpar rating being from the MACD.
NetEase scores highly in four of the seven categories with one neutral reading and two below average ratings. Tencent Music Entertainment Group (NYSE: TME) is the second company that makes it in to the top five, but wasn’t in the top five in the fundamental ratings. All five of the companies score highly in at least four technical categories.
With political tensions high between China and the United States, all Chinese stocks that trade on U.S. exchanges could be volatile in the coming months. There are also concerns about accounting practices after the recent events at Luckin Coffee (Nasdaq: LK) raised red flags about the filing requirements of foreign companies on U.S. exchanges.
These stocks could be volatile in the coming months and quarters. If investors try to stick with the stocks that the screener ranks as the highest ones, both for fundamental and technical analysis, they should fare better than investing in the stocks that don’t rank as highly.
ATHM in upward trend: price expected to rise as it breaks its lower Bollinger Band on May 07, 2025
ATHM may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options. In of 40 cases where ATHM's price broke its lower Bollinger Band, its price rose further in the following month. The odds of a continued upward trend are .
Technical Analysis (Indicators)
Bullish Trend Analysis
The RSI Indicator points to a transition from a downward trend to an upward trend -- in cases where ATHM's RSI Indicator exited the oversold zone, of 24 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
The Stochastic Oscillator demonstrated that the ticker has stayed in the oversold zone for 1 day, which means it's wise to expect a price bounce in the near future.
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where ATHM advanced for three days, in of 300 cases, the price rose further within the following month. The odds of a continued upward trend are .
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on May 05, 2025. You may want to consider selling the stock, shorting the stock, or exploring put options on ATHM as a result. In of 94 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for ATHM turned negative on May 07, 2025. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 49 similar instances when the indicator turned negative. In of the 49 cases the stock turned lower in the days that followed. This puts the odds of success at .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where ATHM declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The Aroon Indicator for ATHM entered a downward trend on April 17, 2025. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is seriously undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (0.973) is normal, around the industry mean (11.896). P/E Ratio (12.333) is within average values for comparable stocks, (50.251). Projected Growth (PEG Ratio) (5.769) is also within normal values, averaging (3.572). Dividend Yield (0.043) settles around the average of (0.027) among similar stocks. P/S Ratio (3.230) is also within normal values, averaging (19.917).
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Seasonality Score of (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. ATHM’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. ATHM’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 88, placing this stock worse than average.
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General Information
an operator of websites for automobile and digital device information
Industry InternetSoftwareServices