From CNBC: 2024-05-12 09:11:42

Investment analysts are questioning the recent China stock rally, citing fundamental weaknesses. Consumer discretionary stocks are expected to see the highest earnings per share growth of about 29% this year. Companies like Tencent and Alibaba have ramped up stock buybacks using their cash reserves. The focus is now on finding industry leaders with high free cash flow. Tencent, Alibaba, and Baidu are set to release quarterly earnings. The Chinese consumer market is showing signs of improvement, with the Consumer Confidence Index edging up in the past nine months. Analysts recommend focusing on firms that create value for consumers, such as Li Auto and New Oriental Education. High-speed train operators in China are raising ticket prices to increase profit margins due to monopoly power. Economic data due to be released on May 17 will shed light on the state of China’s economy. Retail sales are expected to have increased by 3.8% in April.



Read more at CNBC: Chinese consumer stocks to buy even if the overall market rally fades