3 Sorry China Stocks to Sell in May While You Still Can

Market Overview - Chinese stocks are under scrutiny due to shifting global market dynamics, with higher interest rates expected to divert capital from riskier assets like Chinese stocks [1] - Recent military drills by China near Taiwan have added volatility to the Chinese stock markets amid U.S.-China tensions [1] - Investors are advised to be cautious when selecting Chinese stocks due to an unpredictable regulatory environment and complex geopolitical issues [1] Bilibili (BILI) - Bilibili, known as China's YouTube, has over 300 million monthly users and more than 100 million daily active users [2] - Despite a 20% year-to-date stock increase, the company faces modest growth with a year-over-year revenue growth of only 5.51%, significantly lower than its five-year average of 48% [2] - The company's financial metrics show negative year-over-year net income, EBITDA, and return on equity [2] Bilibili's Q1 Results - In its first-quarter results, Bilibili's mobile gaming segment experienced a 13.1% year-over-year revenue drop, significantly worse than analyst projections of a negative 2.8% [3] - The slowdown in the gaming segment raises concerns as the company aims to streamline operations and reduce less successful projects [3] Nio (NIO) - Nio is struggling in the competitive Chinese EV market, incurring significant losses each quarter without a clear path to profitability [4] - The stock has declined over 42% year-to-date and more than 34% last year, exacerbated by a broader market slowdown [4] - Nio's five-year average top-line growth is 899%, but its year-over-year growth is only 13%, with a negative 38% net income margin [5] iShares MSCI China ETF (MCHI) - The iShares MSCI China ETF is considered a stock to offload, as current bullishness appears to be unfounded in macroeconomic improvements [6] - MCHI is trading near its 52-week high of $44.97, with a year-to-date gain of almost 14%, but its long-term performance has been lackluster [6] - The ETF has an annualized volatility of 25%, significantly higher than the median for all ETFs, and an expense ratio of approximately 0.6%, which exceeds the median by 23% [6][7]