Investing in Chinese stocks may require extreme caution, but asset manager Jason Su believes there is an opportunity to enter the market. “Chinese stocks are trading at their lowest prices ever. They offer a huge discount and are definitely a good investment in your portfolio. “There’s a risk in that, but with stocks so cheap, it’s worth the risk,” Hsu, chairman and chief investment officer of Rayliant Global Advisors, told CNBC Pro on March 13. Told. “Opportunities will be lost. Everyone is confident that China will return to competition. So the fact that there is a lot of negative sentiment right now means that preserving China’s future growth will significantly “It means you’re getting a discount,” he added. China’s economy and stock market have been plagued by declining foreign investment and a prolonged downturn in the real estate market. But in February, consumer prices Things may be about to turn around for the Asian powerhouse, which rose 0.7% from a year ago after months of deflation. China’s factory activity also expanded for the third consecutive month in January. Stock markets also recovered. The Shanghai Composite Index, which hit a five-year low in early February, has risen more than 6% in the past month to more than 3,000. The rest of the money should go to U.S. stocks (60%), developed markets like Japan (20%) and other emerging markets (12%). “Growth Story” When it comes to the Chinese market, Su sees state-run food and beverage company Guizhou Moutai as a good strategy in the short term. The asset manager said the alcoholic beverage company had “a lot of brand premium” and liked its “excellent growth story”. “Liquor bottles are collector’s items and are always sold out. You can’t buy them on the company’s website, so they’re only available on the gray market. Every year the price goes up, but people still buy them.” Mr. Sue said. . He expects the company’s profit margins to expand as demand for premium alcohol increases as China’s economy recovers. Given the “very high dividend” paid by Kweizhou Moutai, Su added that it would be a “relatively safe investment in the currently volatile market”. The company’s dividend yield is 2.6%, according to FactSet data. Moutai’s stock price fell nearly 2% in the past 12 months, but rose 4.06% in the past three months. Of the 40 analysts covering the stock, 38 give it a buy or overweight rating, and two give it a hold, according to FactSet data. Analysts’ average price target is 2,158.53 Chinese yuan ($300.30), with a potential upside of 25%. Moutai’s shares are traded on the Shanghai Stock Exchange and held in the Pacer CSOP FTSE China A50 ETF and the KraneShares CICC China Consumer Leaders Index ETF. ‘A name worth investing in’ Su’s long-term focus is on electric car maker BYD. The Warren Buffett-backed company has been in the news amid intense competition from U.S. rival Tesla and other Chinese automakers. BYD faces regulatory headwinds in the U.S. and Europe, which Suh said Japanese automaker Toyota faced from U.S. authorities “just as we started to outperform other companies on quality and price.” We see this as a short-term issue similar to the previous one. “Toyota found a workaround by moving production to the United States, and now we see BYD adopting the same scenario from Toyota. It has the best balance in terms of points. I think it’s the name ‘worth the investment,”’ said Hsu. BYD has also made headlines for its recently released electric supercar, which is said to be capable of speeds comparable to high-end models made by industry race car manufacturers such as Ferrari. BYD stock has increased 4.7% over the past 12 months and about 3% over the past three months. The automaker is listed on the Hong Kong and New York stock exchanges. Of the 35 analysts covering the stock, 33 give it a buy or overweight rating, one has a hold rating and one has a sell rating, according to FactSet data. Analysts’ average price target is HK$304.53 ($38.93), giving the stock a downside of about 45.4%.
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