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The 3 Best China Stocks to Watch in 2023

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After an end to a challenging year, the Chinese abandoned its strict zero-Covid policy despite the country facing a surge in infections. This year, a sharp rebound in the economy is expected due to its reopening. Therefore, it could be an opportune time to add fundamentally strong Chinese stocks Hello Group (MOMO), China Automotive (CAAS), and Tarena (TEDU) to your watchlist. Read on….


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The Chinese economy had one of its worst performances in decades last year as harsh Covid-19 control measures hammered households and businesses. A prolonged lockdown has primarily disrupted the supply chain, adversely affected international businesses, and hurt trade and investment flow between China and other countries.

According to the National Bureau of Statistics, China’s gross domestic product (GDP) grew 3% in 2022, the second-slowest growth rate since 1976, and missed the government’s target of 5.5%.

Despite the country facing an unprecedented Covid wave, the central government recently turned its focus to boosting growth and dropped its strict “zero-Covid” policy, which had taken a heavy toll on the economy. JPMorgan’s global market strategist Chaoping Zhu stated, “We expect to see a sustained economic recovery in 2023 as a result of reopening and policy stimulus.”

A group of government economists and analysts expect Beijing to set a growth target above 5% in 2023. The signs of a significant rebound in the economy have boosted investor sentiment.

Therefore, it could be wise to add fundamentally sound Chinese stocks Hello Group Inc. (MOMO), China Automotive Systems, Inc. (CAAS), and Tarena International, Inc. (TEDU) to your watchlist this year.

Hello Group Inc. (MOMO)

Headquartered in Beijing, the People’s Republic of China, MOMO provides mobile-based online social and entertainment services. The company operates two platforms: Momo, a social search and instant messaging mobile application, and Tantan, a social and dating application.

For the fiscal 2022 third quarter ended September 30, MOMO’s revenue from live video service grew 30.7% year-over-year to $233.01 million. Its income from operations was $73.10 million, up 12.9% year-over-year. The company’s net income increased 13.6% from the year-ago value to $63.20 million. In addition, its net income per ADS was $0.31, an increase of 14% year-over-year.

In terms of forward non-GAAP P/E, MOMO is trading at 7.87x, which is 52.9% lower than the industry average of 16.70x. Likewise, its forward EV/Sales multiple of 0.55 is 71.5% lower than the industry average of 1.93. Also, the stock’s forward Price/Sales of 1.05x is 19.3% lower than the 1.30x industry average.

Analysts expect MOMO’s revenue and EPS for the current fiscal year (ending December 2023) to come in at $1.84 billion and $1.30, indicating increases of 1.6% and 3.8% year-over-year, respectively. Moreover, the company has surpassed the consensus revenue and EPS estimates in three of the trailing four quarters.

MOMO has gained 26.7% over the past month and 22.9% over the past year to close the last trading session at $10.03.

MOMO’s POWR Ratings reflect its promising outlook. The stock has an overall rating of B, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.

The stock has a grade A for Value and a B for Quality. It is ranked #8 of 43 China stocks. Click here to access the additional ratings for MOMO’s Stability, Growth, Sentiment, and Momentum.

China Automotive Systems, Inc. (CAAS)

CAAS is a holding company headquartered in Jingzhou, the People’s Republic of China. The company manufactures automotive systems and components in China through its subsidiaries and sells its products to original equipment manufacturing customers (OEMs).

On December 12, CAAS announced it had introduced a new series of Electric Power Steering systems for China’s largest EV producer, BYD Company Limited (BYDDF).

Qizhou Wu, CAAS’ CEO, said, “Working with BYD brings out the best of CAAS as our engineering team embraces every opportunity to set new records and raise the bar in new product designs. Now the baton has been passed to our best-in-class production team to meet the high expectations of our customer and deliver the high-quality products to the end market.”

For the third quarter of fiscal 2022 ended September 30, CAAS’ net sales increased 26.8% year-over-year to $137.2 million, while electric power steering product sales grew 52.4% from the year-ago value to $44.80 million. The company’s gross profit increased 24.4% year-over-year to $20.90 million, and its income from operations grew 716.7% year-over-year to $4.90 million.

Furthermore, net income attributable to CAAS’ common shareholders came in at $7.5 million and $0.24 per share, compared to a net loss of $0.3 million and $0.01 per share for the previous-year quarter.

In terms of forward non-GAAP P/E, CAAS is trading at 10.45x, which is 26.6% lower than the industry average of 14.23x. Its forward EV/EBITDA multiple of 4.24 is 56.5% lower than the industry average of 9.79.

Analysts expect CAAS’ fiscal year (ended December 2022) revenue to increase 8.3% year-over-year to $539.23 million. The company’s EPS for the same year is estimated to grow 72.2% year-over-year to $0.62. Also, the company has surpassed the consensus revenue estimates in each of the trailing four quarters, which is impressive.

The stock has gained 132.6% over the past six months and 146.8% over the past year to close the last trading session at $6.49.

CAAS’s strong fundamentals are reflected in its POWR Ratings. The stock’s overall A rating translates to a Strong Buy in our POWR Ratings system.

CAAS has an A grade for Value and Sentiment. It has a B grade for Growth. It is ranked first among 43 stocks in the same industry.

Beyond what is stated above, we have also rated CAAS for Momentum, Quality, and Stability. Get all CAAS ratings here.

Tarena International, Inc. (TEDU)

TEDU provides professional education services through full-time and part-time classes under the Tarena brand in the People’s Republic of China. The company operates through two segments: Adult Professional Education and Childhood & Adolescent Quality Education Services. TEDU is headquartered in Beijing, the People’s Republic of China.

On November 28, 2022, TEDU’s board of directors authorized a new share repurchase program over the next twelve months. As per the program, the company is authorized to repurchase up to an aggregate value of $3 million of its Class A ordinary shares (including in the form of ADS) during the 12 months beginning November 28, 2022.

While increasing the intrinsic value of the holdings of existing shareholders, the new share repurchase program also underscores the management’s confidence in TEDU’s business prospects.

On November 15, TEDU announced that it had been selected for inclusion into the list of “Approved Education Providers” for “Promoting Employment of College Graduates through Connecting Talent Supply with Employers’ Demand (Phase II) (“Connect Program”), recently published by the Department of College Students Affairs of the Ministry of Education (MoE).

Under the guidance of MoE, TEDU will launch education and employment support programs to help college students obtain the knowledge and skills demanded by employers. The company is expected to benefit from the recognition and guidance of the MoE significantly.

For the fiscal 2022 third quarter ended September 30, TEDU’s net revenues increased 4.6% year-over-year to $90.40 million, while its gross profit rose 13.1% year-over-year to $49.80 million. The company’s non-GAAP operating income, which excluded share-based compensation expenses, was $4.20 million, up 135.8% year-over-year.

The company’s non-GAAP net income per ADS came in at $0.36, an increase of 104.4% from the previous-year quarter.

In terms of trailing-12-month EV/EBITDA, TEDU is trading at 4.04x, which is 58.6% lower than the industry average of 9.76x. Also, the stock’s trailing-12-month Price/Sales of 0.17x is 81.4% lower than the 0.91x industry average.

Shares of TEDU have gained 164% over the past year to close its last trading session at $5.36.

TEDU’s POWR Ratings reflect its financial strength and strong growth outlook. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.

The stock has an A grade for Growth and a B for Value and Quality. TEDU tops its category of 43 China stocks.

Click here to access additional POWR Ratings for Momentum, Sentiment, and Stability for TEDU.


MOMO shares rose $0.04 (+0.40%) in premarket trading Friday. Year-to-date, MOMO has gained 11.69%, versus a 1.62% rise in the benchmark S&P 500 index during the same period.


About the Author: Mangeet Kaur Bouns

Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using her fundamental approach to analyzing stocks, Mangeet’s looks to help retail investors understand the underlying factors before making investment decisions.

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Entrepreneurship

10 Things Every Working Woman Should Do This Year

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Opinions expressed by Entrepreneur contributors are their own.

Self-care has become an all-encompassing term that has strayed from the importance of everyday commodities that keep us in good health and spirits. Though pampering and “treat yourself” moments still have value, here are ten ways to invest in yourself to produce long-lasting, positive results.

Related: 8 Self-Care Tips From Wildly Successful Entrepreneurs

1. Put money into a 401(k)

It’s never too early (or too late!) to start saving for the future. Depending on your employment status, there are different retirement savings accounts. 401(k)s are the most common since these are employer-sponsored and often come with an employer match. However, freelancers also have options, such as a SEP-IRA or a high-yield savings account, to put away extra, tax-free dollars for retirement.

2. Schedule a health checkup

Self-care first includes taking care of your physical health. It’s easy to discredit regular checkups when you’re feeling healthy, but make this the year to get your blood work done. It creates a baseline for your health to identify areas needing improvement or extra attention.

Also, choose areas in your life where you can make small changes. Improving your health doesn’t always mean a drastic overhaul; it may be as simple as drinking more water or adding an extra 30 minutes of exercise to your day.

Related: 3 Key Tips for Optimizing Your Physical Health as an Entrepreneur

3. Review health insurance benefits

Many people with health insurance aren’t sure exactly what it does and doesn’t cover. If you’re unsure, talk with your HR representative or your health insurance provider to get an overview of deductibles, co-payments and other supplemental benefits you may not be aware of. Then, decide if the health care plan makes sense for your current lifestyle.

Are you paying for benefits you don’t use, or do you need additional benefits that aren’t covered? Selecting the right plan will help ensure you have what you need without paying the extra expense for anything you don’t.

4. Ignite your curiosity

Maintaining healthy cognitive functions through new pursuits gives a boost to the brain. Get curious and find what speaks to you. This can be anything from exploring local museums, embarking on different hiking trails, learning a new language or reading more books.

There’s no limit to what you can do, and these activities can ignite more creativity and motivation in your work. While it may be helpful to look to others for inspiration, make them enjoyable so you’ll want to make them a regular occurrence.

5. Prioritize mental health

Mental health has been at the forefront of people’s lives over the past few years, as many have experienced burnout. We often equate productivity with a value that drives us to go beyond our means and leads to anxiety, stress and depression. Take note of your everyday stressors and see how to reduce or eliminate them. Then, replace them with relaxing outlets that allow you to recharge.

There are various ways to prioritize mental health, from practicing positive self-talk to meditation to scheduling an electronics-free day. You may have to try different solutions before you find one that fits.

Related: 5 Ways to Protect Your Mental Health as an Entrepreneur

6. Implement good sleep habits

Consistent sleep is one of the essential factors of good health but one that is often overlooked. For many, it can be challenging to wind down from the workday. Therefore, you must “train” your body to prepare for sleep by getting into a nighttime routine.

Create a sanctuary for yourself to improve your sleep habits. Enjoy a soothing cup of herbal tea, perform a skincare routine, and snuggle in with a good book rather than scrolling through your phone. Additionally, ensure your bedroom is dark and cool for ideal sleep comfort and turn on soothing sounds if it helps lull you to sleep.

7. Try something new

What have you wanted to try but have always held back? Maybe it’s public speaking or contributing to a blog. Whatever “new” has been on your to-do, make a plan, schedule it on your calendar and go for it. It’s common to hold back from these activities due to fear of the unknown or failure, but trying new things helps create confidence and can be the catalyst you need to push you to the next level.

8. Learn to set boundaries

Boundary setting is crucial to relationships yet can be difficult to master. It doesn’t always involve simply saying no to people’s requests. Instead, it requires protecting your own values when people violate them. Setting boundaries may mean spending less time with certain people, removing yourself from toxic situations, or declining invites to events that don’t improve your life. Explore areas where boundaries will help you grow, and keep in mind growth itself is a work in progress.

Related: How to Set Boundaries to Build Thriving Relationships

9. Spend quality time alone

Learning how to enjoy time spent alone is a valuable gift. We are inundated by a false sense of connection through the internet, which often makes us feel lonelier than ever. Then, we overschedule our calendars to make up for human connections, only to feel drained afterward. Slow it down and plan a few solo dates a month to see how it feels to be truly present with yourself.

For those who aren’t used to spending quality time alone, it can feel awkward and uncomfortable initially, but these stem from your own perceptions. Take in a matinee, sit in a coffee shop and read, or enjoy a concert or event you’ve wanted to attend. Alone time has been linked to improved stress management and greater life satisfaction, so it’s worth trying to give yourself more time.

Related: Turns Out, Those Who Like Being Alone Can Be More Creative

10. Get active

Getting active can take on several directions. It can be physical, emotional or spiritual. The point is to engage with people and pursuits that feed your soul. Whether volunteering within your community, setting yourself an exercise goal, or learning more about personal development, there are endless ways to get active and invest in yourself this year.

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Entrepreneurship

Are You a Winner? How to Truly Define Winning in Your Business

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Businesses gauge their performance typically with dozens of goals and metrics. But you can’t do everything at once. The challenge is to get people focused on the one thing that’s most important right now. If it moved in the right direction, it would eliminate a weakness (or capitalize on an opportunity) and improve financial outcomes. You improve that, and you win.

However, not every company clearly defines winning. A catalog of goals can pull the organization in multiple directions and stretch finite resources. Numerous goals can inherently be at odds, working against each other and for conflicting purposes. For example, a cost reduction goal might undermine an innovation goal requiring a significant investment.

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Gen Z Is Making Ugg Boots Fashionable Again: Report

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Ugg boots, the furry, sheepskin boots that defined the 2000s are back, apparently, with spiking interest and Gen Z cachet, according to data from shopping website, Lyst.

The site’s annual quarterly report that highlights the “hottest” 20 fashion brands was released on Thursday, and, as Insider noted, Ugg is on it for the first time since the index began in 2017.

“Gen Z shoppers are breathing new life into once dormant brands … with over 1.2 billion mentions on TikTok — Ugg’s influence is undeniable,” the report notes.

The boots were also sold out of stores during the holidays, it added.

Generation Z, or people born between 1997 and 2012, has demonstrated a penchant for bringing back old technology and trends, from flip phones to “vintage” headphones with cords.

But Ugg boots go back much further — the word “ugg” is actually a general term in Australia that means boots made from sheepskin and fleece, according to the BBC.

The company that created the “UGG” boot, Deckers Outdoor Corporation, is based in the U.S. and has tried and failed to trademark the word in Australia (where a court decided it was a generic word and thus could not be trademarked), the outlet added.

The company says the boots began to gain popularity in California in the 1980s. They were first featured on Oprah’s Favorite Things in 2000 (a huge brand-maker back then) and became “cherished commodities” early in the decade, according to Vogue.

The boots later gained prominence again with a fashion movement that prioritized “ugly” clothes, and have since become an unironic Gen Z favorite, per Insider. Kylie Jenner was also spotted wearing them in November.

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