Chinese stocks may be facing caution from investors, but asset manager Jason Hsu sees a silver lining in the market. Hsu, the chairman and chief investment officer of Rayliant Global Advisors, believes that Chinese stocks are currently trading at their cheapest levels ever, presenting a unique opportunity for savvy investors.
In an interview with CNBC Pro on March 13, Hsu emphasized the potential for significant returns on Chinese stocks despite the risks associated with the country’s economy. He pointed out that the negative sentiment surrounding China has led to stocks being undervalued, making them attractive investments for those willing to take a chance on future growth.
Recent economic indicators suggest that China may be on the brink of a turnaround, with consumer prices rising and factory activity expanding. The Shanghai Composite Index has also shown signs of recovery, gaining over 6% in the past month. Hsu recommends that investors allocate around 7% to 8% of their portfolio to Chinese stocks, with the remaining funds going towards U.S. stocks, developed markets like Japan, and other emerging markets.
When it comes to specific investment opportunities in China, Hsu highlights state-owned food and beverage company Kweichow Moutai as a promising short-term play. He praises the company’s strong brand premium and growth potential, particularly in the luxury alcohol market. With high dividends and a relatively safe investment profile, Kweichow Moutai is seen as a solid choice in the current market volatility.
For a longer-term investment, Hsu has his eye on electric vehicle maker BYD, backed by Warren Buffett. Despite facing regulatory challenges, Hsu believes that BYD has the potential to follow in the footsteps of successful automakers like Toyota by overcoming obstacles and maintaining a competitive edge in the market. The company’s recent launch of an electric supercar further underscores its innovation and growth potential.
Overall, Hsu’s insights into the Chinese market offer a fresh perspective on investing in a region that may be overlooked by some. With careful consideration and strategic allocation, investors may find hidden gems in Chinese stocks that could yield significant returns in the future.
