I’m a huge sinophile and I wouldn’t touch the majorty of Chinese stocks with a bargepole. Actually, I feel a little hypocritical saying that, as 4% of my portfolio is in TCOM which is the US-centred, international rebranding of ctrip which is basically the only travel app you need in China. Personally, I think they have to opportunity to go huge when their international arm gets better known (although it hasn’t made much impact in the first couple of years), but they make so much money in China that they’ll survive a weak launch anyway. Not only is the app really convenient, it’s often cheaper than any of the Western travel companies.
But Chinese companies in general are known for being very corrupt financially and an extremely volatile market. It’s really common for seemingly perfect companies led by very respected business leaders to suddenly crumble exposing hundreds of millions or billions of dollars of fraud. Definitely stay away from real estate or financial services. There’s a reason that the Chinese that are able to invest outside China do so.
The biggest players, JD, Alibaba, Baidu, Tencent, Netease are all pretty stable and have massive turnovers, but this Alibaba case shows that even they can suddenly have massive fines out of the blue, when they don’t really seem to have done anything wrong except getting too big, which this fine isn’t going to solve.
But honestly, pretty much anything in China operates differently to here, you definitely won’t understand the market, and you’ll find it next to impossible to find out useful things about Chinese companies unless you read/speak Chinese very well.