‘After-the-coronavirus’ stocks at bargain basement prices are screaming ‘buy’ at gutsy investors, some analysts say
- More volatility is likely ahead, but investors should look for survivors and thrivers, analysts say
- Sectors focused on fun, convenience and health are expected to outperform
The Chinese internet ecosystem of fun, convenience and health is expected to emerge even stronger in the “after-the-virus” world. And with related stocks now trading at bargain-basement prices, it’s time for aggressive investors to start selectively shopping, analysts say.
Lockdowns, work- and school-at-home orders, and coronavirus fears have focused consumers more than ever on their smartphones and other digital devices. Gradually, new habits and mindsets shaped by the pandemic will point toward which companies and their stocks will outperform.
“People should pick companies that can survive or excel in this new environment,” said Alex Wong, director of asset management at Ample Capital, who sees a “polarisation” in Hong Kong-listed stocks, with investors dumping traditional retail and travel for internet-connected stocks.
Technology stocks listed in Hong Kong and mainland China will benefit from a rise in demand for e-commerce, cloud services and the fifth-generation mobile network. Internet giants Tencent and Alibaba, which between them dominate everything from e-commerce to fin tech and cloud services in China, should do well, analysts say. So, should Kingdee International Software Group, which provides cloud services to businesses, they add. (Alibaba owns the South China Morning Post.)
Meanwhile, a fitness kick in the wake of a pandemic will boost Chinese sports retailers Anta Sports and Li Ning, analysts predict.
Stocks of select domestic consumer companies in China – which first dealt with the virus and is expected to be the first country to bounce back – are also expected to do well. Hengan International, China’s biggest diaper and sanitary napkin maker, food delivery service Meituan Dianping and hotpot chain Haidilao International are favoured by some analysts.