Amid President Xi Jinping’s visit to the U.S., two major Chinese firms saw exciting earnings beats. Both Tencent (TCEHY) and JD.com (JD) reported Q3 financial results that beat analysts’ expectations. In a year in which media narratives about China investing haven’t shined the greatest light on opportunities there, the news is welcome. An earnings beat for both key firms suggests more positivity than those narratives had previously allowed, and may speak to the case for added China investing in 2024.
Tencent, one of the largest multimedia companies in the world, is also the world’s largest video game vendor and offers services like social networks, e-commerce, mobile games, payment systems, and more. JD.com, meanwhile, focuses more specifically on e-commerce, one of the two largest B2C online retailers in China by volume and revenue. Together, the duo not only represents key metrics by which to understand China’s economy, but also key opportunity areas if consumers do start spending after significant savings.
So just how did TCEHY and JD do in Q3? TCEHY’s revenues increased 10% year over year (YoY) to $21.5 billion (RMB 154.6B), per analysis from KraneShares. TCEHY also saw adjusted net income rise RMB 44.9B compared to expected RMB 39.98B. For JD, revenue rose 1.7% YoY to RMB 247.7B ($34 billion) versus expectations of RMB 246B. JD saw its net income hit RMB 10.6B ($1.5B) compared to expectations of RMB 9.24B, as well.
Using ETFs for China Investing
Those numbers boosted each stock within the last five days. JD saw its stock rise 7.8% over the last five days, while TCEHY’s stock has risen 5.7%. The duo of firms could boost China’s overall outlook entering 2024, or at least serve as a lesson that China investing still merits attention. Those looking to invest in China should consider ETFs like the KraneShares China Internet and Covered Call Strategy ETF (KLIP) for their China exposures.
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