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Asian stocks worth considering
21
Mar
Asian stocks worth considering

 

Until today, we have never made detailed overviews of the Asian market. It seems that the time has come, and today we will take a look at the Chinese, Taiwan and Macaun markets.

Asian assets became much discussed after the second Shanghai bubble burst of 2015 that affected not only China and other Asian countries, but shook the whole world. After the dropdown analysts said that the Asian market is loaded with overestimated stocks, so it’s not worth investing in. The Shanghai bubble has already become less distended, and it’s become easier to analyze the underlying power of the companies. Despite the previous estimates, some of the market actors are really worth considering.

The ranking we are publishing today includes the quotes that have fallen since March 2015 most severely. We assess only large companies whose capitalization exceeds $5B with rather low (up to 30) P/E. These companies, despite the price decrease, remain profitable, and some of them pay quite high dividends, so it may be the right time to invest in them.

The charts in this article are given in the currency of trading, while all other data is transferred into US dollars (also marked as $).

 

1. Great Wall Motors

  • Ticker: 2333
  • Stock Exchange: Hong Kong Stock Exchange
  • Country: China
  • Currency: Hong Kong dollar
  • Capitalization: $11B
  • Annual turnover: $9.5B
  • P/E: 4.0
  • Annual dividends: 6.8%
  • Price change (ytd): –62%

Great Wall Motors off-roader in operation.

Automobile producer founded in 1984. It owns 4 car assembling plants and 20 car parts production plants. Until 2010 it specialized mainly in truck production, starting to produce personal automobiles only lately — and this transition brought success to Great Wall. At the moment it produces around 700,000 autos per year, and about a third of them is exported.

After the crisis of 2008 Great Wall’s stocks started to grow. During the period of 2009—2015 their price increased sixtyfold! This growth cannot be called purely speculative, the company really was on the rise. Even when the price reached its peak, the stocks were still not overestimated. The recent problems in the Chinese market, however, affected Great Wall: its stocks fell almost four times. It pays rather high and stable dividends, and in 2015 it paid them twice.

2333 копия.jpg

Great Wall Motors is an attractive investing opportunity. Its stocks are very cheap, they are definitely underestimated. The P/E is the lowest among the companies in this ranking, and the further dive of stock price is unlikely. 

 

2. Beijing Xinwei Telecom Tech Group

  • Ticker: 600485
  • Stock Exchange: Shanghai Stock Exchange
  • Country: China
  • Currency: Renminbi
  • Capitalization: $8.0B
  • Annual turnover: $473M
  • P/E: 16
  • Annual dividends: 0.03%
  • Price change (ytd): –55%

Chinese billionaire Jing Wang, Xinwei Telecom president, discusses the possible support of the left-wing Nicaraguan government standing in front of a communist poster with Mao Zedong.

Telecommunications company. It specializes in network testing and services. Its main products include Netpecker, Oservice, Teramon and AirGazer. In 2013 it tried to diversify its interests, however: its idea was to build a waterway through Nicaragua to create competition for the Panama Canal.

Xinwei Telecom quotes have been extremely volatile lately. In 2006-2011 they moved between 10 and 20 RMB, in 2012 they fell to the level of 7 RMB, in 2015 they soared to 62 RMB, falling again as of late. According to Google Finance, the company paid dividends only once, in 2015, and they amounted to the generous 0.03%. 

485 копия.jpg

Xinwei Telecom can be considered rather attractive for investors, but its stock price is extremely volatile, and it does not pay high dividends.

 

3. AVIC Capital Holdings

  • Ticker: 600705
  • Stock Exchange: Shanghai Stock Exchange
  • Country: China
  • Currency: Renminbi
  • Capitalization: $6.8B
  • Annual turnover: $1.0B
  • P/E: 18
  • Annual dividends: 1.2%
  • Price change (ytd): –55%

ARJ 21 is the first China-produced passenger plane with AVIC logo.

Financial company engaged in commerce in the field of aircraft engineering and air transportation of China. It is directly connected with the Aviation Industry Corporation of China (AVIC), but is engaged in aircraft trading and leasing.

AVIC Capital Holdings was one of the main companies involved in the second Shanghai bubble burst of 2015. From October 2014 to June 2015 its stocks rose five time, and then rolled back to the previous level in 2016. The company paid dividends in 2013-2016, but there was no strict schedule of payments.

705 копия.jpg

AVIC Capital Holdings is not too attractive for investors: the P/E is rather high, and the dividends are low.

 

4. Wynn Macau

  • Ticker: 1128
  • Stock Exchange: Hong Kong Stock Exchange
  • Country: China (Macau)
  • Currency: Hong Kong dollar
  • Capitalization: $6.6B
  • Annual turnover: $3.8B
  • P/E: 12
  • Annual dividends: 7.4%
  • Price change (ytd): –51%

Wynn Macau, one of the main entertainment sites of the Chinese islands.

Large entertaining site in Macau that includes a hotel, shopping malls and a casino. Macau is a former Portuguese colony and the richest Chinese region. Just like Hong Kong, Macau enjoys some freedoms that are unavailable in the Chinese mainland - just like casinos. Thanks to the tourism income, Macau has become one of the best place to live in the world: the GDP here reaches the level of the developed European countries, while the average lifetime reaches 85 years. Wynn Macau was opened in 2006 and features 600 rooms, 500 casino tables and around 400 slot machines.

Although the Hong Kong market is tied to the markets of the Mainland, it has a number of special features. Wynn Macau did not suffer much from the bubble of 2015. Its stocks reached their highest price in 2014, and have been gradually falling since then. Wynn Macau pays high dividends, but it does not stick to any schedule.

maca копия.jpg

This company can be called a good investment opportunity. Its quotes are at the minimum levels now, while the dividends are high.

 

5. MediaTek

  • Ticker: 2454
  • Stock Exchange: Taiwan Stock Exchange
  • Country: Taiwan
  • Currency: Taiwan dollar
  • Capitalization: $11B
  • Annual turnover: $6.4B
  • P/E: 12
  • Annual dividends: 9.2%
  • Price change (ytd): –50%

MediaTek-produced chip.

Semi-conductor producer. It is a fabless enterprise, which means it does not own any plants, outsourcing the production to other companies. MediaTek is focused on the development and marketing of the produce. MediaTek's chips are mostly intended for wireless networks, HD TV, DVD and Blu-ray technologies.

MediaTek quotes have been unstable lately. They fell and rose several times, and the stock price of the company is now almost on the level of 2008. Despite all these fluctuations, the company still pays stable dividends once per year.

2454 копия.jpg

MediaTek's attractivity can be compared to the one of Wynn Macau: high and stable dividends, low stock price and moderate P/E contribute to it.

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