Investing.com -- Bernstein noted a mixed macroeconomic outlook for China in 2025 while expressing optimism about specific internet stocks that benefit from “idiosyncratic growth drivers” and shareholder-friendly policies.
The firm upgraded JD (NASDAQ:JD).com to "outperform," driven by its focus on profitability amid government support for durable goods consumption. Bernstein said JD’s valuation was at under 8 times 2025 estimated earnings, which provides an asymmetric opportunity despite macroeconomic uncertainty.
While brokerage downgraded online recruitment platform Boss Zhipin to "market perform," noting challenges in offsetting macro headwinds with paying user and average revenue per user (ARPU) growth.
Among its top picks, Bernstein said Tencent, Meituan, NetEase (NASDAQ:NTES), and PDD Holdings, pointing to attractive valuations and growth opportunities.
Tencent, trading at 12 times 2026 estimated earnings, and Meituan, at 13-14 times, offer entry points, Bernstein said, despite recent pressures from gaming comparisons and international spending.
PDD's valuation at 9 times 2025 earnings reflect reduced investor expectations, while NetEase has momentum following positive Q3 earnings and promising gaming announcements.
Bernstein noted that modest valuation multiples across the sector have attracted contrarian investors, even as market sentiment continues to swing on China’s macroeconomic outlook.
Shares of key Chinese internet firms have seen heightened volatility, with tactical trading and mean reversion influencing large stock moves.
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