This is a precarious time to be investing in Asia. Tech stocks have been a popular space to look for promising growth. And if you are willing to deal with the volatility along the way, top tech stocks could be quite attractive. Perhaps many investors are not that familiar with the development in Asia, or China where most of its homegrown tech companies seek to list in the global stock market. The big names of Alibaba (BABA Stock Report) or JD.com (JD Stock Report) hopefully do ring some bells. It’s a massive market in Asia. And despite the giant size of those Asian tech companies, it will only get bigger from here.
JP Morgan Asset Management is also betting that some Asian tech stocks could double in value in three to five years’ time. This comes as a global pandemic that makes working and playing online a force of habit. Considering that China and emerging markets in Asia appear to be containing the virus reasonably well, it gives the region an advantage in the recovery. With all that in mind, here are three tech stocks in Asia that could deliver big returns over the next decade.
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Sea Limited (SE Stock Report) is the leading internet company in Southeast Asia and Taiwan. The seven markets it serves in these regions have twice the population of the U.S. at 600 million. And it’s one of the fastest-growing regions in terms of GDP per capita. SE stocks have been threading higher in anticipation of quarterly earnings that are due this week. The company is best known for its gaming segment, Garena, and its e-commerce site, Shopee.
When you have a popular e-commerce platform and a high-gross gaming business under one company, it is hard not to see the growth prospects here. The game title Free Fire owned by the company was the third-most downloaded gaming app in the world during the second quarter.
Free Fire was initially launched in 2017 and was the most downloaded game of 2019. Its strong performance seen during the second quarter signals that it continues to have strong staying power. We’ll learn more when the company reports its earnings in August.Top Tech Stocks To Buy Or Sell Now: Tencent Holdings
Tencent (TCEHY Stock Report) is the world’s largest video game publisher. Its portfolio of games and major stakes in global blockbusters are making it one of the best tech stocks to buy. Even if you do not know Tencent, you would have heard of its super-app WeChat. The gaming segment generated 35% of Tencent’s revenue last quarter. It grew throughout the coronavirus pandemic as many stayed at home. And just today, we saw Tencent overtake Facebook (FB Stock Report) in terms of market capitalization, making it the world’s 7th most valuable company. This comes after TCEHY stocks rallied nearly 40% year-to-date.
If you are thinking of stocks that are coronavirus-proof, look no further than Tencent. The tech giant’s online advertising business, gaming, fintech and cloud segments are showing double digit percentages growth. Almost all of their services are naturally resistant to the pandemic. This makes it one of the best defensive investments you can find in the market. Initially, investors were skeptical whether the company can sustain the growth witnessed during the first quarter.
Well, as China recovers from the pandemic, coupled with the strategic acquisitions made by Tencent, the company is likely to deliver double-digit percentages growth in the coming quarters.Top Tech Stocks To Buy Or Sell Now: NetEase
NetEase (NTES Stock Report) is a Chinese gaming and online services company. The company has a strong pipeline of upcoming game releases, including Sky in the third quarter. In addition, NTES is also branching into differentiated content for its NetEase Cloud Music service. It is targeting independent musicians and testing electronic music live sessions, singing apps, and other potential growth sources. As the streaming service gains more traction, it could provide another solid revenue stream on top of its gaming segment.
The company’s pristine balance sheet and a strong portfolio of high-margin, self-developed games are undoubtedly making it one of the top gaming stocks to watch. As mobile games become increasingly globalized coupled with the development capabilities from NetEase, it is reasonable to assume that these qualities could bring further potential upside to NTES stock price. This could lead to a $100 billion market cap in 2 to 3 years time.