3 Tech Stocks Long-Term Investors Should Buy in June

With countries globally starting to come out of lockdown after coronavirus, Asia seems to be leading the way. However, the way businesses and companies operate will have changed forever.

As long-term investors, that means anticipating the changes in the investment landscape and ensuring we buy companies that will “win” in this new normal.

Naturally, that means investing in tech-oriented firms that are leveraging technology to make peoples’ lives easier. These types of companies have generally navigated Covid-19 successfully and are set to keep on winning.

With that in mind, here are three China stocks that I think investors should can start buying, or adding to, in June.

1. Meituan Dianping

Meituan Dianping (SEHK: 3690) is an online services giant in China that has a leading “super app” that gives users access to food delivery, group buying and much more. The company also has a sizeable online travel segment.

The company recently released earnings for its first quarter and the numbers were much better than expected.

Although revenue fell 12.6% year-on-year to RMB 16.75 billion (US$2.35 billion) during the first three months of 2020, its leading food delivery platform didn’t suffer as much as had been expected.

The company is the top dog in China’s food delivery market, with over 60% market share. However, what should get investors excited is its up-and-coming in-store, hotel & travel division, which is a key growth driver.

Although travel has been adversely impacted due to Covid-19, the company has integrated itself into the everyday lives of Chinese people who plan a holiday. With the big likely to get bigger after economies exit lockdown, Meituan Dianping is set to be a winner.

2. JD.com

E-commerce giant JD.com Inc (NASDAQ: JD) should be no stranger to investors. The company is an online shopping behometh as well as a logistics giant in its own right too.

JD.com’s latest earnings bolster its case as a leading e-commerce platform in China, with first-quarter sales up 21% year-on-year to RMB 146.2 billion.

The firm is also showing progress on improving its profitability, a long-held complaint of the stock versus its fellow giant competitor Alibaba Group Holding Ltd (NYSE: BABA) (SEHK: 9988).

With the company also investing heavily into other ventures including JD Logistics and JD Health, to name just a few, JD.com is set to keep growing its reach.

Better yet, the company is also planning to list its shares in Hong Kong via a secondary offering. This should happen some time in mid- to late-June.

3. NetEase

Finally, we have online games developer NetEase Inc (NASDAQ: NTES). The Chinese gaming firm is well-recognised as the number two online games developer in China behind giant Tencent Holdings Ltd (SEHK: 700).

However, what I like about NetEase has been its consistent track record in producing successful games. It has been listed on the Nasdaq since 2000 and has generated substantial long-term shareholder returns since then.

Now, though, it is benefitting from the “stay-home” trend that has been adopted since the outbreak of Covid-19. In its first-quarter earnings release, NetEase saw revenue increase an impressive 18.3% year-on-year to US$2.4 billion.

However, what really stands out for me is its Online Education division, which saw year-on-year revenue growth of a whopping 139.8%. Also known as YouDao, the platform allows remote learning and will likely continue to show solid demand over the longer term.

Again, investors will benefit from NetEase planning to list its shares in Hong Kong, too. The company plans to raise US$2-3 billion in a secondary offering in Hong Kong, with shares set to start trading on the city’s stock exchange on 11 June.

分享給你的朋友