These Chinese stocks listed in the U.S. are rebounding after getting pummeled in 2020

Published Tue, Mar 9 20217:45 PM EST

Evelyn Cheng @in/evelyn-cheng-53b23624 @chengevelyn

Key Points

Beaten-down U.S.-listed Chinese stocks range from social media platform and dating app operator Momo to state-owned giants like PetroChina, which plunged more than 50% and 30% in 2020, respectively.
CNBC looks at three of these downtrodden names in rapidly growing Chinese industries that have gotten a boost from a clearing of regulatory clouds, or new businesses.

For the still rapidly growing Chinese market, only some of the big names listed in the U.S. fell to cheaper prices last year. These beaten-down stocks range from social media platform and dating app operator Momo to state-owned giants like PetroChina , which plunged more than 50% and 30% in 2020, respectively. The "Dogs of the Dow" investment strategy — buying the 10 highest-yielding names of the 30-stock benchmark index — cannot be strictly applied to these downtrodden Chinese stocks since many do not pay dividends. But it's still worth looking at what names may have fallen to more attractive prices. In a fast-growing market like China, the potential gains are significant. At the high end of the China play last year were popular start-ups like electric car maker Nio — up more than 1,000% — and video platform Bilibili — up over 350% — which analysts say can run further. Here are some of last year's most beaten-down U.S.-listed Chinese stocks, including ones that are now on a tear. Shanghai-based China Eastern Airlines, Guangzhou-based China Southern Airlines, recruitment website 51Job and Weibo — China's version of Twitter — were among the worst-performing Chinese companies on New York exchanges last year. For the three other names below, they are plays on rapidly growing Chinese industries that have gotten a boost from a clearing of regulatory clouds, or new businesses. LexinFintech This consumer-facing financial technology company plunged more than 50% last year amid the coronavirus pandemic and regulatory uncertainty, particularly around Chinese industry giant Ant. The Alibaba-affiliated company was forced to abruptly suspend its massive IPO in November, and Chinese regulators have increased their scrutiny on technology companies selling loans and other products similar to those of banks. For LexinFintech , management "sees limited impact" from new online lending rules, according to an investor call with company executives on Feb. 26 hosted by China Renaissance. The analysts have a "buy" rating on the stock and a price target of $20 a share. China Renaissance analysts are particularly upbeat on the company's "buy now, pay later" interest-free installment purchase system that merchants in China can offer customers. Launched in January, the product is similar to that of Afterpay, an Australian start-up that soon minted a 30-year-old billionaire. Lexin shares are up more than 60% so far this year, closing at $10.89 on Tuesday. Agora The company reportedly powers the real-time audio chat app Clubhouse that has surged in popularity in the last several weeks. Needham analysts pointed to Agora 's more than 70% year-on-year revenue increase in the fourth quarter, and a doubling in active customers to 2,095 during that time. The analysts cautioned that the "impressive" numbers "likely failed to live up to speculation around potential upside from interactive voice-based social apps like Clubhouse and Yalla," particularly since voice services cost less. Needham has a "buy" rating and $78 price target on the stock. Shares are up more than 50% so far this year, after falling 20% last year. IQiyi Sometimes dubbed the "Netflix of China," iQiyi shares fell more than 15% last year as the Chinese video market saw the rapid rise of platforms such as Bilibili , Kuaishou and ByteDance's Douyin. Investors have been watching for growth in iQiyi's subscriber count, which fell to 101.7 million as of Dec. 31, down from 104.8 million in the prior quarter. However, as Loop Capital Markets Managing Director Rob Sanderson put it, the debate over whether iQiyi is on the rise or decline remains unchanged. Critics will point to the subscriber decline, while supporters of the stock say the coronavirus pandemic affected iQiyi's ability to produce enough content, he said. Sanderson has a "hold" rating and a price target of $18 a share. "The stock has been bound in an unusually wide trading range over the past two years" from below $18 a share to above $24," he said. Shares have climbed 50% so far this year to the top of that range. — CNBC's Michael Bloom contributed to this report.

A sign of 5G is seen in Pudong district in Shanghai, China April 25, 2019.

Aly Song | Reuters

For the still rapidly growing Chinese market, only some of the big names listed in the U.S. fell to cheaper prices last year.

These beaten-down stocks range from social media platform and dating app operator Momo to state-owned giants like PetroChina, which plunged more than 50% and 30% in 2020, respectively.

The "Dogs of the Dow" investment strategy — buying the 10 highest-yielding names of the 30-stock benchmark index — cannot be strictly applied to these downtrodden Chinese stocks since many do not pay dividends. But it's still worth looking at what names may have fallen to more attractive prices.

In a fast-growing market like China, the potential gains are significant. At the high end of the China play last year were popular start-ups like electric car maker Nio — up more than 1,000% — and video platform Bilibili — up over 350% — which analysts say can run further.

Here are some of last year's most beaten-down U.S.-listed Chinese stocks, including ones that are now on a tear.