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These investment ideas are favoured by equity analysts in the Year of the Rooster

Equity market analysts highlight energy, raw materials, industrials, technology, and health care among themes to watch this Lunar New Year

PUBLISHED : Thursday, 26 January, 2017, 6:57pm
UPDATED : Thursday, 26 January, 2017, 7:49pm

China will celebrate the Year of the Rooster, which gets underway Friday. Here are some top stock ideas for the new year from market analysts.

Market watchers in general favour industrials and raw materials as important themes in a year when the Chinese government is likely to place heightened emphasis on infrastructure investment growth.

“We see visible upside potential in Chinese equities for the Year of the Rooster in 2017 and suggest that investors position themselves for a ‘crowing rooster’, which the map of China resembles, ” said Yuliang Chang and Joseph Huo, strategists for Deutsche Bank, in a recent note.

Among sectors, Deutsche Bank analysts have ratings of “overweight”, which means they view the investments as attractive, for financials, energy, and industrials.

Their top 10 stock picks include Hong Kong-listed Ping An Insurance, China Merchants Bank, brokerage firm Huatai Securities, PetroChina, cement manufacturer Anhui Conch Cement, China State Construction International Holdings, which is the largest construction contractor in Hong Kong, and AviChina Industry & Technology, a maker of civil aviation products.

They also prefer some Chinese companies listed on the mainland and in the US, including Shenzhen-traded Gree Electric Appliances, the American Depositary Receiptsof Chinese online giant NetEase and private educational service provider New Oriental Education & Technology Group.

Meanwhile, Credit Suisse analysts said the coming Lunar New Year will be favourable for old economy stocks.

“The government will continue to maintain infrastructure investment growth with an accelerating pace to ensure the economic growth will be above 6.5 per cent,” Credit Suisse analysts said in a report.

They recommend the Hong Kong-listed shares of Anhui Conch Cement, steel maker Angang Steel, Xinjiang Goldwind Science & Technology, China Construction Bank, Ping An Insurance, and Huatai Securities.

They also favour real estate developer China Resources Land, car maker Guangzhou Automobile Group, dairy product producer China Mengniu Dairy Company, and pharmaceutical supplier CSPC Pharmaceutical Group.

Among other top picks in Hong Kong, Credit Suisse was upbeat on Macau casino Galaxy Entertainment, Hong Kong-based conglomerate Cheung Kong Holdings, which is controlled by tycoon Li Ka-shing, and Hong Kong property developer CK Property.

JP Morgan analysts also forecast robust earnings growth for Chinese IT, health care, materials, and some consumer sectors.

Their selections include Ping An Insurance, Bank of China, diesel engine maker Weichai Power, China Resources Land, car manufacturer Brilliance China, beer supplier China Resources Beer, and CSPC Pharmaceuticals.