Atour Lifestyle Holdings climbed to new highs Tuesday, the latest in a batch of China stocks that have touched buy points as the country's stock market recovers while Beijing and the U.S. patch up trade relations.
And it's not just the well-worn China leaders such as Baidu, Tencent and Alibaba that are firming up. A sublayer of stocks in the consumer, financial, electric vehicle and other industries displays bullish charts.
Atour, the hotel operator, early Tuesday missed Q2 earnings expectations but beat sales estimates, according to FactSet. The stock topped the 37.46 buy point of a base-on-base formation but ceded most gains in afternoon trading. With an IBD Composite Rating of 95, it remains a China stock to watch.
H World Group, another hotel chain, is rounding out a cup base with a 38.60 buy point. Last Wednesday, the stock climbed back above the 200-day moving average as the company beat sales and profit views. Its Composite Rating is 58. Both H World and Atour operate mainly as franchises or a "manachised" model in which H World doesn't own the hotels but manages them.
Up Fintech Holding jumped more than 17% last week, as the brokerage topped an 11.52 buy point in heavy volume. Last week, Citigroup upgraded the stock to buy from neutral and raised the price target to 14 from 9.50. According to FactSet, the parent company of Tiger Brokers reports earnings Wednesday as it tries to extend a hot growth streak. EPS jumped more than 2,300% and 115% the past two quarters.
Futu Holdings, another brokerage, is almost back to its 2021 record high of 204.25 after more than doubling since April. Shares are extended. Last Wednesday, the company beat profit and sales estimates. Citigroup, BofA and Barclays raised their price targets.
China Consumer, Auto Stocks
In the consumer space, Miniso Group is nearing a 52-week high as it nears a buy point. The stock corrected 50% earlier this year as tariffs walloped the discount retailer. The stock is near a 27.71 cup buy point, although it has topped an earlier entry at 22.29. Last week, shares soared 35% after Miniso gave a mixed Q2 report but said it's managing tariff costs.
Vipshop Holdings broke out of a cup-with-handle base Aug. 14, the same day it beat second-quarter expectations. The stock is in buy range from its 16.66 buy point to 17.49. The stock has a Composite Rating of 90.
A couple of electric vehicle makers are in solid chart patterns.
XPeng is rounding out a cuplike base with a 27.16 buy point. It has already climbed above an early entry at 22.85. The automaker has been rallying since it beat sales and profit estimates on Aug. 19. Earnings have jumped 48%, 28%, 70% and 68% in the past four quarters. Sales climbed 23%, 20%, 140% and 129%. It has overtaken Tesla with a Composite Rating of 83 vs. Tesla's 61.
Rival Nio has rebounded to the highest level since October. Shares topped a 5.21 handle buy point Thursday and are now extended from the buy range. Nio will report Q2 results Tuesday before the open of U.S. trading. Nio's Composite Rating is 67.
The most impressive China stock this year is Zepp Health, which has skyrocketed more than 1,400%. The maker of wearable fitness tracking devices was mired under 4 per share for months, until it suddenly started racing higher in early July. The stock, which trades around 41 today, has a 74 Composite Rating. There is no new entry so far.
China Stocks To Watch
Among other China stocks setting up:
- NetEase is forming a flat base with a 141.45 buy point. Although the digital games provider missed views on Aug. 14, investors seem to remain upbeat about its recovery. It has a 97 Composite Rating.
- Joyy, a social media provider, reports earnings after the close today. The stock has been forming a flat base with a 55.27 buy point. It has a Composite Rating of 88.
- Full Truck Alliance is forming a cup base with a 13.35 buy point. Shares rallied last week after the logistics software firm beat second-quarter estimates. The Composite score is 97.
- Online insurance provider Yuanbao is forming a base with a 31 buy point. On Monday, it topped a trendline entry around 29. The company went public on the Nasdaq April 30 at 15 per share. It has a 95 Composite.
- GDS Holdings is finding support at its 10-week moving average as it recovers from a 68% plunge from February to April. The data center operator beat Q2 expectations Wednesday. Its Composite Rating is 72.
China-Focused ETFs
Among the largest China stocks, Tencent is at a four-year high. Its most recent buy point was 66.74 from a cup with handle. Baidu is forming a base with resistance around 95. Alibaba is also basing ahead of its earnings report Friday morning.
Some China stock ETFs also are performing well.
The iShares MSCI China ETF is at the highest point since February 2022. Krane CSI China Internet is testing the October highs. Both are up more than 30% so far this year. IShares China Large Cap ETF has climbed back to the highest level since January 2022. It remains in buy range from the 37.62 buy point of a flat base. The range goes to 39.50.
The Shanghai Composite closed Tuesday up 15.4% year to date, according to Dow Jones Market Data. The Hong Kong Hang Seng Index is also near 52-week highs and up 27.2% for the year.
China Stocks And U.S. Policy
Gains in Chinese equities accelerated as the CSI 300 index came close to a one-year high, Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said in a report Monday.
"The story there is not only about the Fed (loosening) but also expectations that the Chinese authorities will announce more stimulus measures, topped by rising appetite for Chinese chip stocks on news that DeepSeek will replace its Nvidia chips with local players," she wrote.
See Which Stocks Are In The Leaderboard Model Portfolio
Reports that Nvidia asked several suppliers to stop working on H20 chips — which Nvidia tailored for China export — sent shares of Semiconductor Manufacturing International Corp. up more than 10% Friday. SMIC is often seen as China's equivalent of Nvidia, Ozkardeskaya added.
Under a temporary truce that ends in November, the U.S. and China lowered tariffs and the two sides continued negotiations. In a flare-up Monday, President Donald Trump threatened steeper tariffs on China if it doesn't allow more exports of rare-earth magnets.
Last week, the Shanghai index closed at its highest level in a decade "on the belief that Trump's trade-war bark is much worse than his bite," Yardeni Research said in a report. "But we think Trump's bite could be pretty bad: If Chinese leader Xi Jinping doesn't give Trump a splashy 'grand bargain' trade deal, Asia's biggest economy could face tariffs far above the current 30%."
