China’s economy shrank by 6.8 per cent in the first quarter of 2020 after the coronavirus shut down large swathes of the country, but it was the first major economy to show a recovery.
It's economy is forecast to expand 8.2% in 2021, the highest growth since 2012, according to a survey of 35 economists by Nikkei Quick News.
Most economists expect U.S. President-elect Joe Biden's administration will take a more predictable and less confrontational approach towards China -- which could give a short-term boost to the Chinese recovery.
In light of the enticing prospects of a healthy Chinese economy this year, this opens up several opportunities for us as investors seeing penny stocks to buy.
Chinese penny stocks offer a great opportunity to invest in young Chinese companies. But you can also invest in penny stocks that aren’t Chinese but only serve the Chinese markets. Here is a list of Chinese penny stocks worth looking into.
Chinese Penny Stocks: 5 Best China Penny Stocks
1. China Direct Industries, Inc
While not a China-based company, China Direct Industries, Inc offers investors a chance to tap into the Chinese markets. The Deerfield Beach, Florida based company produces magnesium to be exported to China.
China Direct Industries is a hot penny stock for a few reasons. The company operates three segments. They provide magnesium, basic materials, and consultation services. The first segment is responsible for its magnesium production. The second is responsible for providing basic materials to customers in China. The last segment is its consultancy.
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Magnesium is an important mineral that is critical in multiple heavy industries. The Chinese economy has an ongoing need for the products and services provided by China Direct Industries. Fortunately, the company’s stock is still very low, so now is the time to buy shares.
2. China Transinfo Technology Corp
China Transinfo Technology Corp is a holding company. Through its subsidiaries, it provides IT and GIS (geographic information system) solutions. These solutions are created for and applied to system planning, deployment, and construction. The company also engages in data testing and systems audits/optimization. They also provide users’ manuals and customer training for their self-developed software products.
The focus of China Transinfo Technology is public transportation in China. Public transportation is advanced in China. But the country is still working hard to expand the scope and efficiency of its public transportation services. The company is based in Beijing and its penny stock is available and cheap at $3.40.
3. China Marketing Media
China Marketing Media is a hot Chinese penny stock with a small price that has remained below $0.20. It thus offers many shares for a small amount of investment capital.
The social media and advertising industries in China are insular and unique when compared to other countries. But the rapidly-expanding Chinese middle class is creating a new consumer-driven Chinese economy. That’s why many companies from China and abroad are trying to tap into this massive market.
The services China Marketing Media offers include magazines and advertising space. They provide ad space in many mediums. They also offer sales and marketing consultation.
4. Horiyoshi Worldwide Inc
Horiyoshi Worldwide Inc offers a line of products that includes Jewelry of all kinds. The company only produces products with designs from Master Horiyoshi III of Yokohama. Apparel retailers around the world sell the company’s products.
The company’s distribution platform has its products marketed to retailers worldwide and currently sold to 45 luxury retail brands in 25 cities around the world. They offer a line of apparel as well, focusing on the quality of their fabric and the subtle mysteriousness of their clothing.
5. AirMedia Group Inc.
AirMedia Group is a Chinese out-of-home advertising platform that has been performing well recently. It's a great Chinese penny stock to buy. The company has made the news over its transformation over the last decade. The stock is priced very low but is poised to shoot up given its continuing deals with other Chinese companies.
Penny Stocks in Chinese Energy: Why choose them?
While they aren’t always the most popular penny stock listings, Chinese energy penny stocks offer you further options. The Chinese energy industries are already large but are continuously expanding. China is currently the world’s second-largest producer of electricity. The country’s continued economic growth is driving even greater demand for energy production. Furthermore, it’s also driving research and development of a wider array of energy production options.
When many people think of Chinese energy, they think of coal. There’s a good reason for that, as China is still the world’s largest producer of coal. But the last few years have seen the beginning of a new trend, as coal has slowly begun to make way for other forms of energy production. Nuclear and renewable energy are young in China, but the data collected over the last decade points to a changing Chinese energy industry.
Investing in Chinese penny stocks for energy is better now than ever before.
Some notable Chinese Penny Stocks
Here are some notable Chinese energy penny stocks to consider
1. Aluminum Corporation of China Ltd. ACH
Aluminum Corporation of China Ltd. is a Chinese company that produces aluminium. The company also has bauxite and coal mining operations. But the bulk of their work is in aluminium mining, refining, and primary smelting. They also supply raw materials and supplemental materials like primary aluminium and non-ferrous metal products, respectively. On top of that, they provide energy through both coal and renewable energy sources.
The company is based in Beijing but is also listed in Hong Kong and New York. It is the world’s second-largest producer of alumina and the third-largest producer of primary aluminium. It’s thus a huge company that employs over 100,000 people and services a wide range of industries that rely on their products. The Chinese penny stock is down now and currently settling at just under $0.50 per share. It’ a diverse and safe investment that serves both industrial and energy-production needs in China.
2. CNOOC Ltd.
CNOOC Ltd. is a Hong Kong-based investment holding company. It is engaged in the exploration, development, production, and sale of natural gas, crude oil, and other petroleum products. The company has several subsidiaries and is broken down into:
Exploration and Production
CNOOC Ltd. is active in many areas of the South China sea as well as Bohai, the East China Sea, Africa, Europe, and the Americas. Shares are still selling for under $2 each. As Chinese consumption increases, the products and services provided by CNOOC Ltd. will continue to be needed. This company looks to be a great penny stock to buy.
3. China Net Online Holdings Inc.
The company was established in 2003 with its headquarter in Beijing, China. China Net Online Holdings, Inc. offers data analytics, online advertising, precision marketing, and other value-added services. Using its proprietary database, fully integrated services platform, and cutting-edge algorithms, ChinaNet delivers customized, result-driven business solutions for small and medium-sized enterprise clients in China. The company also develops blockchain and artificial intelligence-enabled web/mobile applications and software solutions for the general public, enterprise clients, and government agencies. The stock price as listed on Nasdaq on 14th January 2021 was $2.62.
4. Airmedia Group Inc
Established on the 1st August 2005, Airmedia became the first Nasdaq-listed company in China’s air media industry. AirMedia operates an out-of-home advertising platform targeting mid-to-high-end consumers. AirMedia operates a digital media network in China, dedicated to air travel advertising. AirMedia operates digital TV screens in 37 major airports, including 25 out of the 30 largest airports in China. The stock price of Airmedia as of 15th January 2021 was $2.45.
5. Shaanxi Aoxing Pharmaceutical Co. Ltd
The company was founded in 1995 and is registered in Florida in the US. It is a pharmaceutical company that majors in research, development, manufacturing, and distribution of various narcotics and pain-management products and drug-relief medicine. The company has its office in Jersey city, with headquarters in Shijiazhuang City, outside Beijing. It has the largest and most advanced manufacturing facility for highly regulated narcotic medicines. Its facility is one of the few GMP facilities licensed to produce narcotic medicines by the China State Food and Drug Administration (SFDA). Its stock is listed on the New York Stock Exchange (NYSE), and its stock price as of 14th January 2021 was $2.31.
How To Trade Chinese Penny Stocks
The world has become a global village. Trading from anywhere you are in the world is now one of the easiest things to do. Financial markets are now more accessible than it is used to be, giving investors and businesses alike avenues to tap into opportunities they could not have access to from a distance. When it comes to Chinese Penny stocks, you can trade them from anywhere in the world through the following means:
1. Foreign Direct Investment
There are two ways a foreigner can invest in another country’s stocks through Foreign Direct Investment. The first way is to open a global account with a reliable online broker in your home country. Some of the reliable brokers include Robinhood, E*TRADE, and Fidelity. The second way is for you to open an account with a trusted online broker in China. This will require a bit of research on the Chinese financial market and trusted online brokers with a good reputation for trading. You should also make sure you choose a platform that provides sufficient information on the Chinese financial market and Chinese penny stocks.
2. Multinational Corporations (MNCs)
Multinational Corporations are large companies that have a presence in other countries in the form of facilities, stocks, and investments. If you are interested in trading in Chinese stocks and do not know how to go about it, you can check for MNCs that have a presence in the Chinese financial market and trade their penny stocks. If you are an investor that is always skeptical about buying foreign stocks directly can employ domestic companies that derive a significant portion of sales from overseas.
3. America Depository Receipts (ADRs)
Foreign companies use ADRs to establish a presence in the US. The ADRs can be used to establish a trading platform in the US market but cannot be used in raising capital. Some Chinese companies with penny stocks trade on major American stock exchanges as America Depository Receipts when it comes to Chinese penny stocks. There are currently over 150 Chinese companies that are listed on the US exchanges. If you decide to go for Chinese penny stocks, you can purchase penny stocks of ADRs through an American Broker.
4. Affiliate Firm
When it comes to Chinese Companies and trading of their penny stocks, not all are traded on the US stock exchange. Most Chinese companies prefer to trade on Chinese exchanges. Buying a Chinese penny stock using this medium is quite simple. You only need to get in touch with your brokerage firm and inquire if they allow foreign investing. If they do, your brokerage firm will get in touch with an affiliate firm in China to facilitate the transaction for you.
Having foreign stocks as part of your investment portfolios could have its advantage. It allows you to diversify your investment portfolio and reduce the various risks associated with the various US investment portfolios. Before trading in any Chinese penny stock, it is essential to understand the different risks involved in whatever Chinese penny stock you choose because investment risks are universal. Depending on your risk appetite, you should consider the financial and political climate of one like China before investing.