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Read This Before Buying Chinese Stocks

By Jose Najarro - Jul 7, 2021 at 10:00AM

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China's crackdown on Chinese companies has stock prices trending down.

In today's video I look at the recent news affecting DiDi Global (DIDI -2.33%)Full Truck Alliance (YMM -7.95%), and Kanzhun Limited (BZ -4.09%). Below I share a few highlights from the video. 

  1. China has launched cybersecurity reviews on the three companies and some of their subsidiaries. At the moment these companies are not allowed to register new users. The lack of growth from new users can leave negative fundamental changes to these high-growth companies. 
  2. Douyu (DOYU 5.04%) and Huya (HUYA 3.92%) are also down after articles have surfaced on the web stating that China's antitrust regulators will formally block the planned merger of these two companies. 
  3. Before investing in Chinese companies, investors should have a plan and remember the risk. Limiting a portfolio to a set percentage exposure in a stock or even in a country can help long-term investors during these volatile times. 

Click the video below for my full thoughts and analysis. 

*Stock prices used were the midday prices of July 6, 2021. The video was published on July 6, 2021.


 

Jose Najarro owns shares of HUYA Inc., JD.com, and Pinduoduo Inc. The Motley Fool owns shares of and recommends Alibaba Group Holding Ltd. and JD.com. The Motley Fool recommends HUYA Inc. The Motley Fool has a disclosure policyJose is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

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Stocks Mentioned

Kanzhun Limited Stock Quote
Kanzhun Limited
BZ
$21.82 (-4.09%) $0.93
DiDi Global Inc. Stock Quote
DiDi Global Inc.
DIDI
$2.94 (-2.33%) $0.07
Full Truck Alliance Co. Ltd. Stock Quote
Full Truck Alliance Co. Ltd.
YMM
$7.53 (-7.95%) $0.65
JD.com, Inc. Stock Quote
JD.com, Inc.
JD
$57.05 (0.19%) $0.11
Alibaba Group Holding Limited Stock Quote
Alibaba Group Holding Limited
BABA
$94.77 (-0.10%) $0.10
HUYA Stock Quote
HUYA
HUYA
$3.45 (3.92%) $0.13
Pinduoduo Stock Quote
Pinduoduo
PDD
$48.80 (-1.65%) $0.82
DouYu International Holdings Limited Stock Quote
DouYu International Holdings Limited
DOYU
$1.25 (5.04%) $0.06

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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