Societe Generale in an Asia Equity Strategy report highlighted a basket with Chinese stocks that are constituents of the Resilient Earnings basket.
The MSCI China (NASDAQ:MCHI) is up 6.97% year-to-date and up 24% since the 2022 January low, when it broke out of an “inverse head and shoulders.”
There is, however, a pullback underway, but the 50-day moving average near 58 is likely to be “a first layer of support,” Analyst Frank Benzimra wrote. “If the decline remains contained near 58, the phase of rebound is likely to persist.”
In the report, analysts published a list of names with improving earnings momentum and margin-expansion prospects. They screen for large non-financial MSCI China (MCHI) stocks with 2024 EPS growth consensus estimates of more than 5% over the three-month and six-month periods. These are also stocks that have consensus expectations of net profit margins expanding in 2024.
These are the 23 names:
Tencent Holdings Ltd (OTCPK:TCEHY) – Change in margin: 352 basis points; 3-month EPS revision: 10%; 6-month EPS revision: 10% PDD Holdings Inc. (PDD) – Change in margin: 263 basis points; 3-month EPS revision: 66%; 6-month EPS revision: 94% ANTA Sports Products Limited (OTCPK:ANPDY) – Change in margin: 173 basis points; 3-month EPS revision: 9%; 6-month EPS revision: 8% Kuaishou Technology (OTCPK:KUASF) – Change in margin: 463 basis points; 3-month EPS revision: 17%; 6-month EPS revision: 21% Tencent Music Entertainment Group (TME) – Change in margin: 439 basis points; 3-month EPS revision: 15%; 6-month EPS revision: 16% Inner Mongolia Yitai Coal Co. Ltd (OTCPK:IMYCF) – Change in margin: 152 basis points; 3-month EPS revision: 7%; 6-month EPS revision: 7% NURA Technology Group [Not covered] – Change in margin: 48 basis points; 3-month EPS revision: 12%; 6-month EPS revision: 16% China Tower Corp. (OTCPK:CTOWY) – Change in margin: 98 basis points; 3-month EPS revision: 5%; 6-month EPS revision: 5% Weichai Power Co. (OTCPK:WEICF) – Change in margin: 87 basis points; 3-month EPS revision: 12%; 6-month EPS revision: 21% Aluminum Corporation of China Ltd. (OTCPK:ALMMF) – Change in margin: 67 basis points; 3-month EPS revision: 15%; 6-month EPS revision: 15% China Hongqiao Group (OTCPK:CHHQF) – Change in margin: 228 basis points; 3-month EPS revision: 38%; 6-month EPS revision: 21% Zhongjin Gold [Not covered] – Change in margin: 44 basis points; 3-month EPS revision: 14%; 6-month EPS revision: 14% Eoptolink [Not covered] – Change in margin: 458 basis points; 3-month EPS revision: 27%; 6-month EPS revision: 29% Circuit Kunshan [Not covered] – Change in margin: 248 basis points; 3-month EPS revision: 12%; 6-month EPS revision: 14% Yutong Bus [Not covered] – Change in margin: 184 basis points; 3-month EPS revision: 32%; 6-month EPS revision: 44% JD Logistics (OTCPK:JDLGF) – Change in margin: 66 basis points; 3-month EPS revision: 22%; 6-month EPS revision: 19% Sichuan Kelun [Not covered] – Change in margin: 54 basis points; 3-month EPS revision: 6%; 6-month EPS revision: 6% Yintai Gold [Not covered] – Change in margin: 303 basis points; 3-month EPS revision: 9%; 6-month EPS revision: 9% Sailun Group [Not covered] – Change in margin: 142 basis points; 3-month EPS revision: 16%; 6-month EPS revision: 29% Pop Mart [Not covered] – Change in margin: 74 basis points; 3-month EPS revision: 14%; 6-month EPS revision: 15% Dong-E-E-Jiao [Not covered] – Change in margin: 80 basis points; 3-month EPS revision: 11%; 6-month EPS revision: 12% Shenergy [Not covered] – Change in margin: 165 basis points; 3-month EPS revision: 13%; 6-month EPS revision: 16% XD Inc. (OTCPK:XDNCF) – Change in margin: 57 basis points; 3-month EPS revision: 20%; 6-month EPS revision: 20%