In a year marked by challenges for Chinese stocks, there are notable exceptions—companies showcasing their ability to compete on the global stage. Despite China’s benchmark stock gauge heading for its third consecutive year of losses, certain firms have stood out with impressive performances, propelled by international success. PDD Holdings Inc. and Miniso Group Holding Ltd. exemplify this trend, demonstrating substantial growth in their global endeavors.
Global Winners:
- PDD Holdings Inc.:
- PDD’s US-listed shares have soared by 80% this year.
- The Temu discount shopping app, a legitimate challenger to Amazon.com Inc., gained traction, particularly after a high-profile Super Bowl ad in February.
- PDD leveraged the success of its Pinduoduo app domestically to create Temu for the international audience.
- Miniso Group Holding Ltd.:
- This budget lifestyle retailer experienced a remarkable uptick of over 70%.
- With a flagship store in Times Square since May, Miniso reported record sales and profits, capitalizing on its popular low-priced formula.
- The company expanded its network to over 2,000 stores overseas.
Global Expansion Amid Domestic Challenges:
- The ongoing property crisis and weak consumer spending in China have fueled price wars, motivating companies to explore global markets.
- Companies, including electric vehicle maker BYD Co., have benefited from diversifying single-market risk and boosting profitability through overseas sales.
- BYD Co. posted a record profit for Q3, partly attributed to export growth.
Brokerage Insights:
- BofA has identified 22 Chinese stocks with upside potential due to their global presence, including PDD and PC maker Lenovo Group Ltd.
- Morgan Stanley emphasizes the importance of overseas exposure in the Chinese consumer sector, pointing to stocks like Shenzhou International Group Holdings Ltd. and Pop Mart International Group Ltd.
- Societe Generale acknowledges geopolitical risks but notes that Chinese stocks with significant overseas sales exposure, such as Xiaomi Corp., have outperformed.
- Goldman Sachs anticipates that going global will be a crucial growth driver for China’s internet companies amid maturing domestic markets.
Conclusion:
As China’s stock market faces challenges, companies with successful global strategies have emerged as rare winners. PDD Holdings Inc. and Miniso Group Holding Ltd. exemplify the potential for Chinese companies to thrive internationally, demonstrating that a strong global presence can offset domestic uncertainties.
