Chinese stocks have given up much of their recent gains as investors debate whether the bottom is really in. Fresh data only seem to reinforce how China’s problems can’t be fixed in a few days, while questions swirl around how much — or how willing — policymakers are to act. One theme that hasn’t changed in such an uncertain environment is playing specific stocks. Evercore ISI strategists said many U.S.-listed Chinese stocks are “oversold” and expects those “trading at depressed valuations with an attractive [earnings per share] backdrop to outperform,” analysts said in a Jan. 28 report. They screened for names with more than $1 billion in capitalization and expectations for earnings growth in the next two years. Another criteria was whether the stock is trading at a more than 50% discount to their 10-year average price-to-earnings ratio or more than 50% below its pandemic peak. Part of Evercore’s thesis is that Beijing will take further policy action after an annual parliamentary meeting in early March. The People’s Bank of China has announced a 50 basis point cut to the reserve requirement ratio, effective Monday. The Lunar New Year, China’s biggest holiday of the year, essentially kicks off the following Friday and lasts for an entire week. Such signals come at a time when Chinese stocks have sold off sharply. Evercore pointed …
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[mwai_chat context=”Let’s have a discussion about this article:nnChinese stocks have given up much of their recent gains as investors debate whether the bottom is really in. Fresh data only seem to reinforce how China’s problems can’t be fixed in a few days, while questions swirl around how much — or how willing — policymakers are to act. One theme that hasn’t changed in such an uncertain environment is playing specific stocks. Evercore ISI strategists said many U.S.-listed Chinese stocks are “oversold” and expects those “trading at depressed valuations with an attractive [earnings per share] backdrop to outperform,” analysts said in a Jan. 28 report. They screened for names with more than $1 billion in capitalization and expectations for earnings growth in the next two years. Another criteria was whether the stock is trading at a more than 50% discount to their 10-year average price-to-earnings ratio or more than 50% below its pandemic peak. Part of Evercore’s thesis is that Beijing will take further policy action after an annual parliamentary meeting in early March. The People’s Bank of China has announced a 50 basis point cut to the reserve requirement ratio, effective Monday. The Lunar New Year, China’s biggest holiday of the year, essentially kicks off the following Friday and lasts for an entire week. Such signals come at a time when Chinese stocks have sold off sharply. Evercore pointed …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]
