Alpha Picks
Strategy - Alpha Picks: September Conviction Calls
Analyst
Highlights
- Chinese equities consolidated in August, with the HSI and MSCI China Index dipping 1.2% mom and 0.4% mom respectively, holding most of July’s gains.
- We do not expect a major catalyst from President Xi Jinping’s 24 September visit to the US. Fundamentally we remain positive on TMT and IT hardware.
- We add Han’s Laser, Innovent, NAURA and Tencent to our BUY list. Take profit on BeOne Medicines, and cut losses on EVE Energy, Hesai and Trip.com.
What’s New
- Chinese equities consolidated in August, with the HSI and MSCI China Index dipping 1.2% mom and 0.4% mom respectively, holding most of July’s gains. Our Alpha Picks outperformed the index, led by BUY-rated Cowell (1415 HK), which advanced 23.9% mom during the month, followed by Foxconn Industrial Internet (601138 CH) at 14.4% mom.
- Positive on TMT and IT hardware in September. We do not expect President Xi Jinping’s 24 September visit to the US to deliver a major catalyst. For domestic policy, we expect the government to maintain its stated stance of accelerating implementation rather than introducing large-scale stimulus. We prefer companies leveraged to AI-related capex and the localisation of semiconductor and advanced manufacturing equipment.
- We add Han’s Laser (002008 CH), Innovent (1801 HK), NAURA (002371 CH) and Tencent (700 HK) to our BUY list. We take profit on BeOne Medicines (6160 HK), and cut losses on EVE Energy (300014 CH), Hesai (2525 HK) and Trip.com (9961 HK).
Action
- Add Han’s Laser (002008 CH) to our BUY list, on confirmation of the Apple 3DP order allocation and a step-up in domestic AI PCB equipment orders as customers’ plants complete.
- Add Innovent (1801 HK) to our BUY list, due to robust revenue and earnings growth, smooth R&D and continued new product launches, and further global partnerships.
- Add NAURA (002371 CH) to our BUY list, given breakthroughs in China's semiconductor supply chain and changes in US-China export policies.
- Add Tencent (700 HK) to our BUY list, supported by AI-driven revenue and efficiency gains, stronger WeChat Video Accounts advertising, game licence approvals and Hunyuan ecosystem expansion.
- Take profit on BeOne Medicines (6160 HK).
- Cut losses on EVE Energy (300014 CH), Hesai (2525 HK) and Trip.com (9961 HK).
- Maintain BUY on Alibaba (9988 HK), ASMPT (522 HK), BYD (1211 HK), Cowell (1415 HK), Foxconn Industrial Internet (601138 CH), NetEase (9999 HK) and Shuanghuan Driveline (002472 CH).
Highlights
- Chinese equities consolidated in August, with the HSI and MSCI China Index dipping 1.2% mom and 0.4% mom respectively, holding most of July’s gains.
- We do not expect a major catalyst from President Xi Jinping’s 24 September visit to the US. Fundamentally we remain positive on TMT and IT hardware.
- We add Han’s Laser, Innovent, NAURA and Tencent to our BUY list. Take profit on BeOne Medicines, and cut losses on EVE Energy, Hesai and Trip.com.
What’s New
- Chinese equities consolidated in August, with the HSI and MSCI China Index dipping 1.2% mom and 0.4% mom respectively, holding most of July’s gains. Our Alpha Picks outperformed the index, led by BUY-rated Cowell (1415 HK), which advanced 23.9% mom during the month, followed by Foxconn Industrial Internet (601138 CH) at 14.4% mom.
- Positive on TMT and IT hardware in September. We do not expect President Xi Jinping’s 24 September visit to the US to deliver a major catalyst. For domestic policy, we expect the government to maintain its stated stance of accelerating implementation rather than introducing large-scale stimulus. We prefer companies leveraged to AI-related capex and the localisation of semiconductor and advanced manufacturing equipment.
- We add Han’s Laser (002008 CH), Innovent (1801 HK), NAURA (002371 CH) and Tencent (700 HK) to our BUY list. We take profit on BeOne Medicines (6160 HK), and cut losses on EVE Energy (300014 CH), Hesai (2525 HK) and Trip.com (9961 HK).
Action
- Add Han’s Laser (002008 CH) to our BUY list, on confirmation of the Apple 3DP order allocation and a step-up in domestic AI PCB equipment orders as customers’ plants complete.
- Add Innovent (1801 HK) to our BUY list, due to robust revenue and earnings growth, smooth R&D and continued new product launches, and further global partnerships.
- Add NAURA (002371 CH) to our BUY list, given breakthroughs in China's semiconductor supply chain and changes in US-China export policies.
- Add Tencent (700 HK) to our BUY list, supported by AI-driven revenue and efficiency gains, stronger WeChat Video Accounts advertising, game licence approvals and Hunyuan ecosystem expansion.
- Take profit on BeOne Medicines (6160 HK).
- Cut losses on EVE Energy (300014 CH), Hesai (2525 HK) and Trip.com (9961 HK).
- Maintain BUY on Alibaba (9988 HK), ASMPT (522 HK), BYD (1211 HK), Cowell (1415 HK), Foxconn Industrial Internet (601138 CH), NetEase (9999 HK) and Shuanghuan Driveline (002472 CH).
Analyst
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This report is provided subject to, and must be read together with, the full Disclosures / Disclaimers available at this link, which are incorporated by reference into this report. In particular, this report is intended for general circulation and informational purposes only and does not constitute personal investment advice or a recommendation to buy or sell any investment product or security. You should independently evaluate the information and, where necessary, seek advice from a qualified financial adviser regarding the suitability of any investment. Analyst certifications required under applicable regulations, including SEC Regulation AC (where relevant), are included in this report. By accessing, receiving or using this report, you acknowledge that you have read, understood and agreed to be bound by the Disclosures / Disclaimers, as may be amended, supplemented or updated from time to time.
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