Now that China has announced the new “One Belt, One Road” (OBOR) initiative, the focus is back on Chinese stocks.

Money Morning Chief Investment Strategist Keith Fitz-Gerald has been telling readers about China’s plans for this initiative for over a decade. He says now is the last time to get in or be left behind.

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What is One Belt, One Road? It’s a massive transcontinental infrastructure initiative launched in 2013.

The initiative is meant to expand trade across 68 countries throughout Asia, Eastern Europe, and Africa.

It also includes over $1 trillion in infrastructure investment across the region.

And that $1 trillion estimate could be very conservative…

“The ‘One Belt, One Road’ plan is a $5 trillion initiative being undertaken by China to remake the world in its image,” says Fitz-Gerald. “Not ‘just’ the $1 trillion everybody thinks.”

Despite its size, few Westerners really know much about it. Even fewer are investing in it. The media is only now starting to cover it.

But that does not mean it slipped under the radar of other countries. None other than Russian President Vladimir Putin was in Beijing last week to ensure Russia’s stake in President Xi Jinping’s bid to move China to the center stage in global affairs. Putin was one of 29 heads of state listening as Xi pledged $113 billion to the plan.

One Belt, One Road is meant to evoke memories of the Silk Road trade routes dating back to the Han Dynasty 2000 years ago. Linking the project to the historical trade route is likely a ploy meant to make it seem like a natural development for China. But it is also a way to open up and develop infrastructure-poor regions – and markets – along the route.

It should also bolster China as a world economic leader. And it could mean a profit windfall for investors who know where to look.

Thankfully for Money Morning readers, Fitz-Gerald’s decades of research in the area has helped him uncover the best profit opportunities in China.

Here is one of the best Chinese stocks to buy now to profit from the $1 trillion OBOR initiative…

One of the Best Chinese Stocks to Buy Now to Profit from OBOR

Fitz-Gerald thinks that the top play here is the Internet giant Alibaba Group Holding Ltd. (NYSE ADR: BABA), which already dominates China’s e-commerce industry, much like Inc. (Nasdaq: AMZN) does here.

That’s a big deal, since China is the world’s largest e-commerce market, where sales could reach $2.4 trillion by 2020, according to eMarketer.

He has been recommending this stock since its IPO in 2014. The stock is up about 30% since then.

OBOR is going to boost Alibaba even further by helping build up neighboring economies and connecting them to China. The company will be able to expand its customer base on a global scale, all while the Chinese government foots the bill. That’s not to mention what a growing Chinese economy will do for Alibaba’s profits.

“Alibaba is working on advanced artificial intelligence, autonomous vehicles, and next-generation technologies that will bolster China’s economy for decades to come,” Fitz-Gerald said.

Analysts are projecting the stock could hit a price target of $180 this year, a 49% gain from current trading.

The company reported better-than-expected revenue in its fiscal fourth-quarter earnings report before the bell May 18, but because it narrowly missed profit expectations, it fell sharply at the open of trading. However, despite the volatility, the stock came roaring back to close higher on the day.

That tells us the market continues to look for great performance in the weeks ahead.

As for the recent downgrade of Chinese sovereign debt by Moody’s, Fitz-Gerald is not at all concerned. Indeed, Moody’s reaffirmed Alibaba’s A1 credit rating, saying, “Alibaba’s consistently strong revenue growth is in line with Moody’s expectations and reflects the company’s success in raising monetization rates for its mobile channel and the growing transaction volumes in its retail marketplace in China.”

Given that the Chinese broader market and Alibaba are both trading higher since the sovereign debt downgrade was announced, the market is not that concerned either.

— Money Morning Staff


Source: Money Morning