If investing in familiar domestic stocks wasn't already intimidating enough, the prospect of researching, buying, and holding shares of Chinese companies can feel even more overwhelming.

But there's no denying that businesses seeking to capitalize on the world's second largest economy can hold tremendous promise. So we asked three top Motley Fool contributors to each find a Chinese stock they think investors should be watching closely this month. Read on to learn why they chose Tencent Holdings (TCEHY -2.04%), Yum China Holdings (YUMC -2.06%), and Bilibili (BILI -5.09%).

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Game on

Steve Symington (Tencent Holdings): Thanks to a combination of broader macroeconomic concerns and a drawn-out Chinese regulatory freeze on new video game license approvals, shares of Tencent are down more than 20% over the past year as of this writing. And that's despite a modest post-earnings pop this past November after Tencent's revenue and earnings managed to soar despite the freeze, helped by the Chinese tech giant's decision to reorganize in an effort to shift its focus toward its promising advertising, digital content, payments, and cloud services businesses.

Since then, however, Chinese regulators finally began digging into backlog of gaming license requests, and we saw a handful of Tencent's newer mobile game titles start to appear in the approved lists in late January.

Investors should be watching closely in Tencent's impending quarterly report -- which is slated for this Thursday, March 21, after the market closes -- for signs of not only whether the company's lucrative gaming business is back in action, but also whether it was able to sustain momentum in its other segments. If Tencent can show investors it's effectively firing on all cylinders once again, I think the stock's recent gains will only be the beginning of a much longer-term trend.

Check out the latest earnings call transcripts for Yum China and other companies we cover.

Plenty of room for this chicken to run

Reuben Gregg Brewer (Yum China Holdings): Western-developed KFC and Pizza Hut are among the world's largest restaurant brands and are the underpinning of Yum China Holdings' business. It also has exclusive rights to develop Taco Bell in China, as well as owning local concepts East Dawning and Little Sheep. With 8,400 restaurants in over 1,200 Chinese cities, Yum China is a fast-food industry leader in the giant Asian nation. 

Although up materially since its late 2016 IPO, the stock has basically gone nowhere for over a year -- even counting the big 24% rise in early 2019. But it has huge growth potential, adding more than 800 new locations in 2018 and pushing systemwide sales up by 5%. It expects to open as many as 650 new restaurants this year, which should support high-single-digit top-line growth. 

YUMC Chart

YUMC data by YCharts

The reason for the stock's weak 2018 showing was probably same-store sales. This performance metric tracks results at units open for at least a year and came in at a weak 1% in 2018. That's not unexpected, given a slowing Chinese economy and increasing local competition. To offset such headwinds, Yum China is looking to improve margin in 2019 by as much as 1.3 percentage points. That, plus the increasing store count, should help keep earnings heading higher as the company continues to build out its business.     

With a P/E ratio of 24, Yum China isn't cheap, but it's also not far out of line with other industry giants. And for long-term investors interested in tapping into China's massive and upwardly mobile population, it could be well worth the price of admission, since there's likely to be years worth of expansion ahead for this Chinese fast-food giant.

China's Gen Z darling

Leo Sun (Bilibili): Bilibili is a Chinese tech company that owns a Gen Z-oriented platform of video games, anime, and online comics. It generates most of its revenue from mobile games -- 62% of its top line last quarter -- but it's aggressively diversifying its business with live video broadcasts, online ads, and an e-commerce platform that's integrated into Alibaba's (BABA -2.06%) Taobao marketplace. Bilibili believes it will eventually generate less than half of its sales from video games.

Bilibili's number of monthly active users (MAUs) rose 29% annually to 92.8 million last quarter. Within that total, its mobile MAUs grew 37% to 79.5 million, and its number of average monthly paying users nearly quadrupled to 4.4 million. Its "official" members, who must pass a "geek culture" entrance exam to access more perks, surged 44% to 45 million. Revenue climbed 57% annually during the quarter, and analysts expect sales to rise 56% for the full year.

Bilibili's rapidly growing base of Gen Z users attracted big investments from Tencent (TCEHY -2.04%) and Alibaba, two aging tech giants that are facing competitive pressure from ByteDance's portfolio of popular Gen Z apps, including TikTok and Jinri Toutiao. It also impressed investors, since the stock now trades much higher than its IPO price of $11.50.

Bilibili isn't profitable, and its losses are widening as it expands its ecosystem with new features, partnerships, and acquisitions such as its recent purchase of NetEase's (NTES 0.93%) online comics. However, the stock doesn't look that expensive at five times this year's sales, and it could rally sharply if trade tensions between the U.S. and China wane.