Accurately identifying China recovery leaders
Identifying positive strategic recovery stocks in China has been paying dividends for those with sufficient experience and analyst boots on the ground.
That is the assessment of Premium China Funds Management’s Jonathan Wu who said that while the recovery of Chinese companies from the Coronavirus close-downs and limitations had been generally impressive, it had already become clear that some companies are doing better than others.
“What is more, our experience suggests that it pays to look beyond the obvious,” he said. “Some of the fastest-recovering companies are not what you’d instinctively expect them to be.”
Wu said that one such company had proved to be the Chinese group buying website, Meituan Dianping, which had progressively spread its wings into local food delivery services, consumer products and retail services.
“For us, Meituan has represented a solid investment because it has weathered COVID-19 better than many other Chinese companies and is on a robust recovery trajectory,” he said. “It is always satisfying when a company outperforms analyst predictions.”
Wu said that notwithstanding more recent news around COVID-19 infections in China, Meituan appeared to remain positive about return to growth – something which looked achievable on the basis of structural changes made by the company including a significant investment in E-bikes.
“Given the manner in which Meituan managed the challenges thrown up by the coronavirus, our research confirms that it has solid prospects moving beyond 2020,” he said.
ABOUT PREMIUM CHINA FUNDS MANAGEMENT
Premium China Funds Management (PCFM) is a boutique funds management group providing specialist Asian equity and fixed-income funds to both Australian and New Zealand investors.
Capturing the growing economies and influence of emerging Asia, PCFM has developed 4 actively managed funds – the Premium China Fund, Premium Asia Fund, Premium Asia Property Fund and Premium Asia Income Fund.
The funds are managed by a large and experienced team with offices in Hong Kong, Shanghai, Singapore and Kuala Lumpur. The directors and investment managers of Premium and its fund offerings have extensive knowledge in Asian equity and credit markets, wealth management, and other financial services.
Jonathan Wu – Executive Director | Head of Distribution and Operations | Chief Investment Specialist
0416 031 676
Derek Paas – Asia Investment Specialist | State Manager (NSW/QLD/WA/ACT/NT)
0406 608 388