Coding in Chinese Companies for Silicon Valley 2.0
Tech giants like Google, Apple and Facebook might seem completely cemented into today’s world.
But what if I told you their global tech monopoly is actually wavering?
The tech beasts of the West are being stalked by Eastern tigers, positioning themselves to become the new kings of the internet jungle.
Chinese tech stocks are incredibly profitable investments. Returns are soaring and there’s no end in sight for continued growth in China’s “new economy” – led by booming tech and service sectors.
Not even wildcard President Trump can stop this probable, and inevitable, Chinese tech-takeover.
Essentially, Chinese technology is where you want to put your money.
The companies we recommend in this article are on a fast-track to dominating the world.
China’s integrated tech and consumer potential
China’s consumer-market, the fastest growing in the world, is a force to be reckoned with.
In major cities, Chinese people use their phones for everything.
Unlike in the U.S., where legacy companies tried to curb the mobile movement, Chinese business has merged seamlessly. The switch to completely mobile payments took only a few years.
And yet, while urban Chinese may be tech savvy, rural people are still “behind the times”.
Mobile phones are slowly infiltrating even the most inaccessible regions across China. (Shutterstock)
But this just creates a silver lining in China’s tech market: consumer growth is exponential!
For instance, in major cities 183 million people shop online. Meanwhile, a whopping 257 million Chinese shop online in smaller cities.
With plenty of room for rural development, not to mention international expansion, Chinese tech companies find themselves set up perfectly for future growth.
How are China’s best preforming stocks so cutting edge?
One of China’s leading internet companies, Tencent, illustrates how the industry is reshaping China’s economy and society.
This year, Tencent’s WeChat social media “app” expanded its monthly active users by 19 percent. That’s nearly a billion people!
So, what makes WeChat so special?
Well, it has more services than Facebook or Instagram. Want a taxi, pay a bill or an at-home pedicure? Only tap.
Wechat allows you to shop, communicate and order transportation just through the phone. (Shutterstock)
China’s tech companies are casting a wide net.
As you can see below, the world’s top seven-biggest listed firms are all internet or technology companies. A few of China’s heavyweights have already made it to the big leagues. In this year alone, both Tencent and Alibaba doubled their market worth.
Even on Wall Street, China’s internet stocks are doing remarkably well.
The KraneShares CSI Index which measures the performance of publicly traded Chinese-based internet companies has proof below.
There’s also more room for growth in China’s market. While the U.S. penetrates 88 percent of its internet population. Right now, China only hits 53 percent.
But wait … how did China’s tech industry become so strong, so quickly?
To nobody’s surprise, China has an overprotective big brother. The government banned non-Chinese major internet firms like Facebook and YouTube. In turn, domestic companies grew up sheltered from foreign competition.
But now these well-bred companies are being released … and they’ll likely trample a few famous entities on their path to internationalize.
Below are our top Chinese tech stock picks. We’ll describe why we highly recommend these thriving companies and how you can profit from their growth.
Tencent Holdings (HK: 0700)
Tencent booth at the 2017 The Global Mobile Internet conference in Beijing (Shutterstock)
Tencent, mentioned previously, is China’s leading internet company. Its business comprises three main segments: social networks, advertising and gaming.
WeChat may be famously popular, but Tencent’s cash cow is actually gaming. It earned over US$4 billion in this year’s first quarter alone. In fact, Tencent rules the global gaming world, surpassing companies like Sony and Nintendo.
Tencent also has great growth potential. It’s still expanding and buying up content. It will likely to become China’s Netflix.
Since the company went public in 2004 at HK$3.70 /share its already shot up +11,251 percent.
Over 2015, Tencent’s advertising-business expanded by 51 percent. Gaming grew by 87 percent! The company’s total revenue rose by 52 percent.
In five years, it will likely be the world’s largest company.
Alibaba (NYSE: BABA)
Alibaba is set to take down Amazon as the globe’s goods merchandiser. (Shutterstock)
For five years in a row Alibaba has reported 50 percent annual revenue growth.
Taobao, Alibaba’s eBay-like marketplace already has 529 million monthly active users.
This company is taking its rivals to the cleaners as well. By gross merchandise volume it outperformed seasoned competitors like Wal-Mart and Amazon.
And like Tencent, Alibaba is destined for great domestic and international growth.
For instance, Alibaba just bought 83 percent of Southeast Asia’s version of Amazon, called Lazada. This will let them expand into new territory under the guise of a trustworthy brand.
Baidu (Nasdaq: BIDU)
Baidu knows what you are looking for. And tracks that for the Chinese government too. (Shutterstock)
The so-called “Google of China” may not be blowing out insane revenue numbers, like our other recommendations. But we still think it is fated for incredible returns.
Why? Because it has the dominant position in an incredibly profitable industry. This is a company you can grow with.
Unlike Google, Baidu is close to securing a monopoly of web searches in China. It’s already has 70 percent of the market’s share.
Baidu’s share price is also standing strong. In 2016, the company’s total revenue rose by 14 percent.
This is a company that will bring excellent returns for patient investors – a powerful tortoise stock.
Talking about Futurists…
We hope you found this series on China insightful. Looking forward, we will be tackling a different sort of giant – conglomerates. But before we dive into the shadowy world of the Bamboo Network, we will begin to gear up for the Lunar New Year holiday with a special series on our top syndicated articles.