While Tesla rival BYD and Alibaba may grab more headlines, Atour Lifestyle certainly qualifies as one of the best Chinese stocks to watch.
And as President Donald Trump navigates trade and tariff tensions with China, here are four reasons to closely monitor Atour stock right now, including how it is teasing a fresh breakout into buy range.
1. Atour Scores Elite Trifecta On IBD Stock Lists
A leading hospitality and lifestyle company in China, Atour’s diverse portfolio of hotel brands focuses on midscale to luxury hotels. As of the end of 2023 (the last data available on the company’s website), Atour operated 1,210 hotels across 198 cities in China. Plus, it had an additional 617 hotels and 62,689 rooms under development.
The company benefits from a young, loyal and growing customer base. With a business model structured to create a closed loop from lodging to retail, the company provides a personalized immersive shopping destination that guides guests from discovery to purchase.
While fellow Chinese stocks to watch Alibaba and BYD remain absent from IBD stock lists, Atour has popped up on three.
Atour stock is on the IBD 50, IPO Leaders and IBD Sector Leaders, our most stringent screen.
2. Wall Street Forecasts 319% Earnings Growth
Impressive sales and earnings growth continues to attract attention from Wall Street.
Over the last seven quarters, Atour delivered revenue gains ranging from 53% to 134%. In the third quarter, the Chinese hotel operator posted $270.5 million in sales. When the company reports fourth-quarter numbers in late March, analysts expect a 33% year-over-year gain to $279.7 million.
Although down from several quarters of triple-digit or better gains, bottom-line growth remains impressive. Over the last three quarters, Atour has generated average earnings growth of 44.4%. For Q4, analysts forecast a 319% spike to 31 cents per share. For all of 2024, Wall Street expects a 36% gain to $1.27 per share, followed by a 28% gain to $1.63 a share in 2025.
Such numbers have Atour scoring the highest-possible 99 Composite Rating, earning it top billing in the Leisure-Lodging industry group. Also note that the company pays a dividend, currently yielding 1.44% on an annualized basis.
3. Relative Strength Line Scores Coveted Blue Dot
As Atour stock teases a new buy zone, it has earned a blue dot in MarketSurge. Indicating clear market leadership, the blue dot highlights how the stock is outpacing the benchmark S&P 500 while the stock trades near a buy point.
Alibaba, which reports earnings on Feb. 20, has also seen its relative strength line climb as funds continue to pile into the stock. A reported partnership with Apple is helping boost confidence in Alibaba’s AI strategy.
The RS line for electric-vehicle maker BYD is surging as the stock soars beyond buy range. The Tesla rival recently launched 21 self-driving EV models featuring chips from Nvidia.
5. Atour Stock Teases New Breakout
A potential breakout to an all-time high offers investors another reason to closely monitor Atour stock.
After a breakout in December, Atour quickly retreated to build another pattern — an early-stage consolidation with a 29.90 buy point. On Wednesday, Atour briefly cleared that entry before pulling back. Early Thursday, the stock is closing back in on the initial buy point.
With a look at other top Chinese stocks to watch, Alibaba continues to blast past the 103.67 buy point in a cup-with-handle pattern that it cleared on Feb. 7. On Monday, shares of BYD gapped up to shoot past the buy zone it also first entered on Feb. 7. After gapping up again on Wednesday, the stock pulled back into buy range early Thursday.
Follow Matthew Galgani on X (formerly Twitter) at@IBD_MGalgani.
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