What's Going On With Chinese Stocks Alibaba, NIO, XPeng, Li Auto On Wednesday?

Alibaba Group Holding BABA and domestic rival stocks continued their rally since China announced stimulus plans to spur demand. Alibaba peers, including Baidu, Inc. BIDU, JD.com, Inc. JD, and PDD Holdings Inc. PDD, traded higher on Wednesday.

Last week, China’s central bank shared plans to cut banks’ reserve requirement ratio (RRR) by 50 basis points or half a percentage point and lower the seven-day reverse repurchase rate to 1.5% from 1.7%. Additionally, China agreed to let homeowners refinance mortgages.

Shawn Yang of Arete Research and Appaloosa Management founder David Tepper rated Chinese e-commerce juggernaut Alibaba as the key beneficiary of the stimulus. Tepper increased exposure to Alibaba and rival stocks.

In August, China signaled an end to its domestic regulatory crackdown on hyperscalars like Alibaba. The Chinese tech companies led by Alibaba have started opening up their “walled gardens” to one another to stay clean in the eyes of the regulators.

Chinese electric vehicle stocks, including NIO Inc NIO, Li Auto Inc LI, XPeng Inc XPEV, and ZEEKR Intelligent Technology Holding ZK, are trading higher on Wednesday, in anticipation of boost in demand from the stimulus package. The companies noted a significant update in their third-quarter and September 2024 delivery.

Is Alibaba A Good Stock To Buy?

When deciding whether to buy a stock, there are some key fundamentals investors may want to consider. One of these factors is revenue growth. Buying a stock is essentially a bet that the business will continue to grow and generate profits in the future.

Alibaba has reported average annual revenue growth of 15.81% over the past 5 years. .

It's also important to pay attention to valuation when deciding whether to buy a stock. Alibaba has a forward P/E ratio of 13.12. This means investors are paying $13.12 for each dollar of expected earnings in the future. The average forward P/E ratio of Alibaba peers is 20.7.

Other important metrics to look at include a company's profitability, balance sheet, performance relative to a benchmark index and valuation compared to peers. For in-depth analysis tools and important financial data, check out Benzinga PRO.

Price Actions: At the last check on Wednesday, BABA stock was up 2.76% at $115.84 premarket. PDD was up 4.59%, JD was up 8.83%, BIDU was up 5.91%, NIO was up 6.40%, XPEV was up 6.46%, LI was up 7.17%, and ZK was up 10.50%.

Photo by Oleg Elkov via Shutterstock