Red chips and H shares are more attractive than other Hong Kong stocks in the longer term because they have the potential to draw strength from faster growth in the mainland's economy, according to Socgen-Crosby Securities (HK).
China research associate director Raymond Jook said investors should seek refuge in defensive stocks - those which can better weather the storm and rebound quicker.
These stocks should have a net cash position or low gearing, a low exposure to interest rate increases, a prudent investment strategy with less involvement in the Hong Kong stock market, less reliance on asset injections, more visible core earnings growth and a strong recurrent income base.
Stocks picked based on this criteria include red chips such as China Foods, China Resources, Ng Fung Hong, Shanghai Industrial and Top Glory.
B shares Zhejiang Southeast Electric and Heilongjiang Electric were picked and H shares Guangdong Kelon and Qingling Motors and N share Huaneng Power.
Mr Jook said there was a potential threat in the long run for red chips which had bought shares in other Hong Kong-listed companies whose market value was reduced during the recent market turmoil.