Investment
Investment banks say it’s time to get back into China, with Goldman naming 10 top stocks
June 10, 2022
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China’s reopening after weeks of big-city lockdowns is “enticing” investors, according to HSBC , while Goldman Sachs has named a raft of stocks it says are at attractive valuations. Both Shanghai and Beijing have started to relax their Covid restrictions after weeks of strict lockdowns. This opening-up — combined with soaring government investment and plummeting stock valuations — are creating investment opportunities, the banks say. In a research note dated June 8, Goldman Sachs named stocks to trade a “turbulent” Asian market, identifying several names set to benefit from government investment. In April, China’s President Xi Jinping called for an “all-out” effort to construct infrastructure such as roads, rail and waterways. In its “Select China ‘New Infra'” basket of stocks, Goldman named smartphone maker Xiaomi and software firm Chinasoft International . It also chose solar firm Xinyi Solar , acoustics company AAC and telco giant China Telecom . “Stocks with exposure to the environmental theme or in the China ‘new infra’ industries can benefit from the global climate change initiative and Chinese govt. support on emerging industries & technologies,” the analysts, led by Alvin So, wrote. Meanwhile, Goldman’s “Environmental & Renewables” basket of stocks included wind power company China Longyuan Power , lithium producer Ganfeng Lithium , utilities company Beijing Enterprises Water and Canadian Solar , a renewables firm that operates in mainland China and trades on the Nasdaq. It also named energy investment company China Everbright . “The valuations of both baskets have de-rated meaningfully over the past year, which we believe has created attractive entry points,” the analysts added. HSBC’s stock picks “Driven by an “all-out” infrastructure push and the return of investment led growth, China reopening is an emerging theme enticing global investors,” HSBC’s analysts, led by Amit Shrivastava, wrote in a research note on June 9. HSBC focused on global stocks with positive exposure to China, picking 22 names including consumer goods company Reckitt Benckiser , chocolate-maker Lindt & Spruengli , engineering company Kone and pharmaceuticals firm Novo Nordisk . Computer hardware firm Logitech and heating equipment company Belimo are also picks for the bank. All of the stocks have “relatively high and positive sensitivity to [the] Chinese business environment and a history of outperformance when mainland China business sentiment is improving,” the analysts said. HSBC described market sentiment towards Chinese stocks as “above average,” and moving towards the long-term mean. – CNBC’s Evelyn Cheng contributed to this report.
Heavy traffic in Shanghai, China, on June 8, 2022, as people returned to work after Covid lockdowns.
CFOTO | Future Publishing | Getty Images
China’s reopening after weeks of big-city lockdowns is “enticing” investors, according to HSBC, while Goldman Sachs has named a raft of stocks it says are at attractive valuations.
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AAC Technologies Holdings Inc Alternative and sustainable energy Beijing Enterprises Water Group Ltd business news Canadian Solar Inc China China Everbright Environment Group Ltd China Longyuan Power Group Corp Ltd China Telecom Corp Ltd Chinasoft International Ltd Chocoladefabriken Lindt & Spruengli AG environment Ganfeng Lithium Co Ltd Goldman Sachs Group Inc HSBC Holdings PLC Investment strategy Kone Oyj Logitech International SA Markets Novo Nordisk A/S Reckitt Benckiser Group PLC Xiaomi CorpJune 10, 2022
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