4 Stocks to Buy on China's Huge Stimulus

While many countries are seeking to reign in spending for 2025, one notable nation is not – China. The Chinese government has been promising a stream of stimulus to boost their lagging economy, and one of those monetary promises was fulfilled last week when they announced an injection of over $55 billion (400 billion yuan) into the banking sector.

Tariffs or not, this could send these four stocks soaring.

The infusion is part of a broad set of stimulus measures designed to boost demand in a country desperate for growth. Inflation in China has been near zero since the start of 2023, while producer prices have actually declined for two consecutive years.

Consumers in the United States might welcome 0.2% annual inflation readings after CPI averaged over 4% in 2021, 2022, and 2023, but China's economy has suffered, and the Shanghai Composite Index (SSE) has stalled out repeatedly since the start of 2022.

However, investors are beginning to perk up now that the government has loaded the stimulus bazooka, and several large-cap Chinese firms could be direct beneficiaries.

Today, we'll examine four Chinese companies with US-traded stocks that could benefit from the government's stimulus plans. Most of these companies are large-cap firms, but they are spread across various industries and sectors. Additionally, some of these stocks dipped following the Trump administration’s new tariff threats at the end of February, which could create a buying opportunity for shrewd investors as March begins.

Alibaba Group Holdings Ltd. BABA

Alibaba is finally making headlines for the right reasons, and its most recent earnings report led to a slew of upgrades from analysts. The Chinese e-commerce giant reported a top and bottom line beat during the February 20 report, leading the stock higher and putting its year-to-date (YTD) gains above 50%. And as Benzinga Edge readers know, the company saw robust growth in key areas like Core Marketplace Revenue (CMR) and the AI-infused AliCloud segment.

Couple these numbers with a 3.7% increase in year-over-year (YoY) Chinese retail sales in December, and BABA shares have a firm footing for further gains. The stock closed down on Friday thanks to renewed tariff threats, but the bullish sentiment has been reinforced by analysts boosting their ratings and price targets.

After the February 20 report, Bernstein and Morgan Stanley immediately upgraded the stock from a Hold to a Buy, while analysts at JP Morgan, BofA Securities, Barclays, and Benchmark all raised their price targets. Even the lowest of the new price targets ($150) implies a 12.6% upside from the closing price on February 28.

Trip.com Group Ltd. TCOM

China's tight COVID restrictions squeezed travel demand, but Trip.com had been struggling long before anyone knew about coronaviruses. The stock reached an all-time high in July 2017 and then steadily declined over the next five years. In October 2022, it had plummeted to 2014 levels, and the company would report substantial losses for the 2022 financial year.

However, the stock began its turnaround in the final few months of 2022. After a choppy 2023, shares erupted in 2024, making new all-time highs for the first time in over seven years. TCOM has pulled back to start 2025, dropping from $77 to $56 in just a few weeks.

However, this pullback could be an opportunity for investors. The company is light on debt and trades at just 16 times earnings. It recently announced a top and bottom-line beat for Q4 2024, prompting both Benchmark and JP Morgan to reiterate their Buy status on the stock with price targets of $80 and $75, respectively. A $75 price represents a nearly 28% upside from current levels.

From a technical perspective, TCOM could soon trigger an oversold signal on the Relative Strength Index (RSI), as the indicator continues dropping toward the key threshold of 30.

FinVolution Group FINV

FinVolution Group is the smallest stock on this list, with a market cap of just $2.14 billion. But like the rest of these entries, the stock showed signs of life in 2024 following a long struggle. FinVolution is (naturally) a fintech focused on linking consumers and borrowers through online marketplaces. 

FINV shares made noise during the meme stock craze of 2021, when the stock jumped from under $2 to over $8 in just three months. But like most meme stocks, FINV found itself back near its pre-craze levels by March 2022. Today, the stock trades back near $8 per share thanks to genuine growth, not retail madness.

FINV has grown EPS by more than 12% over the last 12 months but still trades at just 7 times earnings with a forward P/E of 5.65 and a P/B ratio of 0.58. The company projects to grow EPS by more than 13% in 2025, and the stock is already up more than 21% in 2025. Analyst coverage on the stock is light because of its smaller market cap, but both fundamental and technical signals point to more potential gains ahead.

JD.com Inc. JD

If Alibaba.com is a business marketplace for third-party buyers and sellers, JD.com is more like the Chinese version of Amazon. The company has one of the most extensive e-commerce operations in the world and a reputation for high-quality products and customer service. And while its $60 billion market cap pales compared to BABA's $315 billion, JD.com remains undervalued despite impressive earnings growth.

JD shares peaked in early 2021 before experiencing a severe drawdown. After cresting the $100 mark in January 2021, the stock plummeted below $22 by the start of Q1 2024. An 80% drawdown is enough to frighten even the most risk-tolerant investors, but the stock began to rebound last year as the company stabilized. JD.com brought in $156.33 billion in revenue during the four most recent quarters, an increase of 3% over the previous four quarters.

The company will report its Q4 2024 numbers on March 6, and analysts are looking for revenue of $45 billion, which would be the best figure since COVID hit. Barclays upped their price target from $50 to $55 on February 28 in anticipation of the report, representing an upside of 24% from the current market price.

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