Upgrading Chinese equities: If there is ever a good time to en | FSMOne SG - Research Highlights

Upgrading Chinese equities: If there is ever a good time to enter China’s stock market, it is now.

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• There has been no shortage of headwinds facing China’s economy in 2022. Despite the obvious risks, we think the sell-off in Chinese stocks could be on the cusp of a turnaround.

• We expect China to roll out more policy measures to help support the economy. In fact, the government has already been rolling out economic support measures and fighting back against plummeting confidence in recent months.

• Adding to our optimism is the fact that China is emerging from its worst Covid-19 outbreak in more than two years, with daily Covid-19 cases trending down nationwide in recent weeks.

• Moreover, we believe that investors may have been too pessimistic on the earnings outlook for Chinese companies, following a string of better-than-expected earnings results.

• The valuations of Chinese equities look attractive, with a lot of negatives already priced in. With several catalysts on the horizon, we have upgraded Chinese equities from 4.0 Stars to 4.5 Stars “Very Attractive”.

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