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<Research>G Sachs Updates APAC Conviction Buy List for May, Tabulates Favoured CN Stocks
Recommend 129 Positive 228 Negative 122 |
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Goldman Sachs released a report updating its Asia Pacific Conviction List for May. Some of the Greater China "Conviction List Buys" covered by the broker are listed below: Stock｜Target Price CHINA RES BEER (00291.HK)｜HK$51 SHENZHOU INTL (02313.HK)｜HK$98 AIA (01299.HK)｜HK$98 KUAISHOU-W (01024.HK)｜HK$75 TSMC (2330.TW)｜TWD975 H World Group (HTHT.US)｜US$52 Goldman mentioned that China's new "9 Measures" policy opinions were introduced last month, aiming to outline a potential policy-driven upturn in the stock market by improving shareholder returns, corporate governance standards and institutional investor ownership. The broker analysed that if the valuation gap between A-shares and their international peers is narrowed on those 3 major fronts, A-shares could rise by as much as 20%. In a "blue-sky" (bullish) scenario, A-shares could potentially hike 40% if they catch up with international peer valuations. The broker was strategically positive on A-shares but believed offshore stocks may perform better in the upcoming 3 months, especially as international investors' risk appetite was still recovering. The broker believed consumer technology and service-related sectors could outperform, and favoured quality large-cap stocks while taking into account the cash return factor. Goldman also noted the increasingly positive attitude of mainland regulators towards the platform economy, and has identified four key trends from recent visits to the mainland. For e-commerce and online advertising, 2Q24 would face a higher base. Shareholder return policy was at the centre of valuation support. Meanwhile, global peers were tightening regulations on personal data, e-commerce import duties and tariffs amid geopolitical tensions, reducing investors' short-term risk appetite and depressing valuations. In addition, dotcom leaders were consolidating their businesses with core segments. For example, BABA-SW (09988.HK) (BABA.US) regained growth momentum in GMV, MEITUAN-W (03690.HK) worked to stabilise its local services, while TENCENT (00700.HK) is expected to resume growth in domestic game revenues from 2Q onwards, thanks to monetisations and new game launches. Chinese stocks mentioned by the broker with Buy ratings include Full Truck Alliance (YMM.US), BOSS ZHIPIN-W (02076.HK) (BZ.US), TME-SW (01698.HK) (TME.US), NEW ORIENTAL-S (09901.HK) (EDU.US), and TAL Education (TAL.US). NTES-S (09999.HK) (NTES.US) were preferred over smaller peers in the gaming sector. For e-commerce advertising, the broker preferred KUAISHOU (remained Conviction Buy) and BABA. AAStocks Financial News |
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