China has been boosting investment in its industries to meet rebounding global demand for its products and is the fastest growing economy so far in 2021. However, fundamentally weak Chinese stocks iQIYI (IQ) and BEST (NYSE:BEST), which are being discussed in the Reddit forum wallstreetbets (WSB), could see a price pullback in the near-term. Thus, we think these two stocks are best avoided now. Read on.China witnessed 2.3% annual GDP growth in 2020 at a time when most major global economies were struggling to recover. The country is now striving to achieve its targeted 6%-plus GDP growth for 2021. The heightened demand worldwide for China-manufactured goods and major investments in its strategic industries and fixed assets should contribute to what will likely be solid growth by China this year.
But despite having robust economic support, many Chinese companies are struggling to stay afloat due to strong competition and continuing political tensions with the Western countries.
Popular Chinese stocks iQIYI, Inc. (IQ) and BEST Inc. (BEST) have been losing momentum for quite some time, and are found frequently in the r/WallStreetBets’ top 10 dashboard. We think this, together with unfavorable analyst sentiment regarding their growth prospects, makes these names best avoided now.