{"id":3383,"date":"2023-05-02T21:27:11","date_gmt":"2023-05-03T01:27:11","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/china-exposed-stocks-have-rallied-but-bargains-still-exist-says-analyst\/"},"modified":"2023-05-02T21:27:12","modified_gmt":"2023-05-03T01:27:12","slug":"china-exposed-stocks-have-rallied-but-bargains-still-exist-says-analyst","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=3383","title":{"rendered":"China-Exposed Stocks Have Rallied, but Bargains Still Exist, Says Analyst"},"content":{"rendered":"<div id=\"js-article__body\" itemprop=\"articleBody\" data-sbid=\"WP-BAR-0000634567\">\n<div data-layout=\"wrap\n              \" data-layout-mobile=\"\" class=\"\n        media-object\n        type-InsetMediaIllustration\n          wrap\n  article__inset\n        article__inset--type-InsetMediaIllustration\n          article__inset--wrap\n    article__inset--lead\n  \"><\/p>\n<figure class=\"\n        media-object-image\n        enlarge-image\n        img-wrap\n        article__inset__image\n      \" itemscope=\"\" itemtype=\"http:\/\/schema.org\/ImageObject\"><\/p>\n<\/figure><\/div>\n<p>Stocks exposed to China\u2019s postpandemic reopening have understandably soared over the past six months, despite taking a back seat in April. There might be a buying opportunity for companies riding a recovery in the world\u2019s second-largest economy, particularly those that still look inexpensive.<\/p>\n<p>Six months ago, China began sending signals it was moving away from a zero-Covid policy, which had hindered economic growth. Since early November, the MSCI China index and a basket of \u201cshadow China\u201d companies\u2014global players that get more than 10% of sales from China\u2014have both rallied, notes Jefferies global head of microstrategy Desh\u00a0Peramunetilleke.<\/p>\n<div class=\"paywall\">\n<p>Shadow China companies \u201cin all the major sectors have outperformed their peers over the past six months,\u201d he writes, despite the slowdown in April, a situation he expects will be temporary. These companies also tend to have protective moats, and have more potential for positive earnings revisions, \u201cwhich should allow for further upside.\u201d<\/p>\n<p>That makes sense, given the surge that companies in the U.S. and elsewhere in the world experienced when they more broadly reopened after 2020s pandemic-related restrictions. As <em>Barron\u2019s<\/em> previously noted, Macau casinos are seeing a resurgence in revenue, multinational corporations have reported \u201cgreen shoots,\u201d in the nation, and exports jumped amid factory reopenings.<\/p>\n<p>All that comes as China\u2019s economy rebounded faster than expected. Nonetheless, industry watchers debate\u00a0how widespread or sustainable its resurgence is, particularly as relations with the U.S. continue to be frosty.<\/p>\n<p>Certainly, China\u2019s recovery won\u2019t necessarily be linear. Peramunetilleke notes that earnings expectations for the shadow China basket have come down sharply, even as valuations look somewhat stretched, making earnings expansion all the more important for ongoing gains.<\/p>\n<p>Nonetheless, he argues that for all the mixed data, the \u201cChina economic revival [is] on track. That makes shadow China companies, which give investors exposure to that nation without the heightened risk of owning China-listed stocks, attractive\u2014as long as investors don\u2019t overpay. \u00a0<\/p>\n<p>Peramunetilleke compiled a list of shadow China laggards with market caps above $5 billion that derive at least 10% of revenue from Hong Kong\/China. The list includes stocks that have returned less than 20% since the start of November, and excludes companies that have cut full-year earnings estimates by more than 10%, and leaves out stocks trading above their five-year average forward price-to-earnings valuation.<\/p>\n<p>That leaves him with a list of attractively valued stocks that could still benefit from China\u2019s rebound, however fitful. High on that list are<br \/>\n        Keysight Technologies<br \/>\n       (ticker: KEYS),<br \/>\n        Qualcomm<br \/>\n       (QCOM),<br \/>\n        Agilent Technologies<br \/>\n       (A),<br \/>\n        Danaher<br \/>\n       (DHR),<br \/>\n        Corning<br \/>\n       (GLW),<br \/>\n        Amphenol<br \/>\n       (APH), and<br \/>\n        Waters<br \/>\n       (WAT) among others.<\/p>\n<p>By contrast, he notes that some of the shadow China companies that have returned more than 20% since November have gotten pricey, in absolute terms and in relation to their five year average. Some of these names include<br \/>\n        Nvidia<br \/>\n       (NVDA),<br \/>\n        Lattice Semiconductor<br \/>\n       (LSCC),<br \/>\n        Wynn Resorts<br \/>\n       (WYNN), and<br \/>\n        Skechers<br \/>\n       (SKX).<\/p>\n<p>Write to Teresa Rivas at teresa.rivas@barrons.com<\/p>\n<\/p><\/div>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.marketwatch.com\/articles\/china-exposed-stock-bargains-ea164a2e?mod=markets\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Stocks exposed to China\u2019s postpandemic reopening have understandably soared over the past six months, despite taking a back seat in April. There might be a buying opportunity for companies riding a recovery in the world\u2019s second-largest economy, particularly those that still look inexpensive. Six months ago, China began sending signals it was moving away from [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":3384,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-3383","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-markets","tag-featured","post_format-post-format-gallery"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>China-Exposed Stocks Have Rallied, but Bargains Still Exist, Says Analyst | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Stocks exposed to China\u2019s postpandemic reopening have understandably soared over the past six months, despite taking a back seat in April. 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