Skip to content
Learning that drives better investment decisions

China: Attractive Due to Good Price Momentum, Low Beta

Watch the video with Andrew Stotz or read a summary of the country profile on China.

Four Pillars of GDP: Driven by private consumption, investment

Overall, China is experiencing fast GDP growth with all pillars contributing to GDP growth, and private consumption contributing the most. Even though net exports contributed the least to GDP growth, exports rose by 36% year-over-year.

Attractive due to good price momentum, low beta

China has started to pick up relative to Asia ex-Japan in terms of price performance, and EPS growth is expected to pick up after a relatively poor 2015 and 2016 showing.

#China has good price momentum and high expected #earnings growth

A. Stotz Four Elements: China’s rank relative to Asia

Overall, China is moderately attractive in Asia considering all our four elements: Fundamentals, Valuation, Momentum, and Risk.

Fundamentals: Its moderately attractive, seeing as return-on-equity has been in line with the Asia ex-Japan average.

Valuation: It remains moderate, due to a relatively high PE.

Momentum: It has good price momentum and high expected EPS growth.

Risk: China has a relative low beta to Asia ex-Japan.

Only Consumer Staples and Financials haven’t lost in value

Top 3 largest sectors: Financials: 24% of the market; Industrials: 18%; Consumer Discretionary: 12%.

Best sector & stock: Consumer Staples: +0.3% & Fujian Anjoy Foods Co Ltd: +53.1%.

Worst sector & stock: Materials: -8.2% & Xinjiang Qingsong Building Materials and Chemicals Group Co Ltd: -50.8%.

Are you investing in China?

If you like our research, share it with your friends.

DISCLAIMER: This content is for information purposes only. It is not intended to be investment advice. Readers should not consider statements made by the author(s) as formal recommendations and should consult their financial advisor before making any investment decisions. While the information provided is believed to be accurate, it may include errors or inaccuracies. The author(s) cannot be held liable for any actions taken as a result of reading this article.