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China: Momentum Still Going Strong

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

Four Pillars of GDP: Main driver has been private consumption

Overall, China is experiencing fast GDP growth with all four pillars contributing to GDP growth, and private consumption contributing the most and net exports contributed the least.

Strong price and earnings momentum

In the past five months, China A has shown strong price performance relative to Asia ex Japan. Analyst’s forecast that earnings are expected to grow above Asia ex Japan in 2017-2019CE*.

#China appears attractive in Asia, #momentum still going strong

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

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

Fundamentals: Moderate, ROE has been in line with Asia ex Japan.

Valuation: Moderate, relatively expensive PE and dividend yield.

Momentum: Strongest price momentum, and second highest EPS growth.

Risk: Moderate, high volatility but low beta to Asia ex Japan.

Materials had the best price performance in 3Q17

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

Best sector & stock: Materials: +19.5% & Hunan Valin Steel Co Ltd: +134.8%.

Worst sector & stock: Utilities: +0.1% & Shenzhen Nanshan Power Co Ltd: -14.0%.


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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.