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<Research>Daiwa Sees Rebound Wave Seemingly Sustainable, Suggests Buying TENCENT/ Trip.com/ MEITUAN-W/ BABA/ PDD on Pull Back
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Daiwa has issued a report noting that most Chinese internet stocks under its coverage have rallied 30-50% since the announcement of stimulus measures. Although most investors believe that substantial policy support is needed to justify a long-term market reversal, the broker predicted that the process may take several months, and that investors will act quickly to avoid being too late. In addition, the broker noted recently that value stocks under pressure have quickly returned to their 3-year average levels, and the abandoned broad consensus of underweighting positions in Chinese stocks has led to a shift in funds towards high-beta stocks. However, compared to the past 5-year average PER, BABA-W (09988.HK) (BABA.US) was still 0.6SD lower. TENCENT (00700.HK) was 1SD lower. JD-SW (09618.HK) (JD.US), BIDU-SW (09888.HK) (BIDU.US), and NTES-S (09999.HK) (NTES.US) were 1.2SD/ 1.5SD/ 1.6SD lower. As many stocks have been overbought in a short period, the broker did not rule out market consolidation in the coming days. It also believes that many long-term investors have not had time to react and are waiting for better entry points. The broker suggested buying TENCENT, TRIP.COM-S (09961.HK) (TCOM.US), MEITUAN-W (03690.HK), BABA, and PDD (PDD.US) on any pull back. AAStocks Financial News |
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