Alpha Picks
Strategy - Alpha Picks: November Conviction Calls
Analyst
Highlights
- Chinese equities fell further in October, with the HSI and MSCI China Index down 5.4% mom and 7.2% mom respectively.
- Markets may remain volatile in November, with the US midterm elections on 3 Nov 26. On a positive note, policy support for equities is stepping up: broad-based A-share ETFs drew their largest ytd weekly inflow during the week of 19 October, while PBOC and CSRC stepped up capital-market support tools. We see a high probability of a bottom forming in November.
- We add CR Mixc, Inovance and Weichai to our BUY list and cut losses on DiDi.
What’s New
- Chinese equities fell further in October, with the HSI and MSCI China Index dropping 5.4% mom and 7.2% mom respectively. A-shares led the decline. The CSI 300 Index fell 8.5% mom, its 12th consecutive weekly decline, while the STAR Composite Index and the ChiNext Index both fell over 20% during the month. Technology and semiconductor stocks bore the brunt of the sell-off, while defensive sectors outperformed. Our Alpha Picks generally underperformed. Trip.com (9961 HK) was the best performer at 0.5% mom, followed by Sino Land (83 HK) at -0.9% mom.
- November may see further market volatility, with the US midterm elections on 3 November. On a positive note, policy support for equities is stepping up. Broad-based A-share ETFs drew Rmb153.4b in the week of 19 October, their largest weekly inflow this year, while the PBOC carried out a Rmb100b swap operation for brokers and funds on 3 Nov 26 and cut the share buyback relending rate by 25bp to 1% on 4 November. Monetary and fiscal support is also continuing, with the PBOC moving to an overnight policy rate and Rmb800b of new policy financial instruments now fully deployed. We see a high probability of a bottom forming in November.
- We add CR Mixc (1209 HK), Inovance (300124 CH) and Weichai (2338 HK) to our BUY list. We cut losses on DiDi (DIDIY US).
Action
- Add CR Mixc (1209 HK) to our BUY list, on visible double-digit core net profit growth, five new mall openings in 4Q26 and 16 in 2027, and a 6.3% 2027 dividend yield backed by a 100% payout.
- Add Inovance (300124 CH) to our BUY list, due to its resilient 20% growth in general automation on AI-related and Apple supply-chain demand, margin recovery from 4Q26 as cost hikes are passed on, and progress in embodied AI.
- Add Weichai (2338 HK) to our BUY list, given its rising AI data centre genset volumes, with management guiding for more than 4,000 units in 2026 and more than 6,000 in 2027, first gas genset shipments in 4Q26 and a 6.4% dividend yield.
- Cut losses on DiDi (DIDIY US).
- Maintain BUY on Alibaba (9988 HK), ASMPT (522 HK), BYD (1211 HK), Foxconn Industrial Internet (601138 CH), Innovent (1801 HK), NAURA (002371 CH), NetEase (9999 HK), Sino Land (83 HK), Tencent (700 HK) and Trip.com (9961 HK).
Highlights
- Chinese equities fell further in October, with the HSI and MSCI China Index down 5.4% mom and 7.2% mom respectively.
- Markets may remain volatile in November, with the US midterm elections on 3 Nov 26. On a positive note, policy support for equities is stepping up: broad-based A-share ETFs drew their largest ytd weekly inflow during the week of 19 October, while PBOC and CSRC stepped up capital-market support tools. We see a high probability of a bottom forming in November.
- We add CR Mixc, Inovance and Weichai to our BUY list and cut losses on DiDi.
What’s New
- Chinese equities fell further in October, with the HSI and MSCI China Index dropping 5.4% mom and 7.2% mom respectively. A-shares led the decline. The CSI 300 Index fell 8.5% mom, its 12th consecutive weekly decline, while the STAR Composite Index and the ChiNext Index both fell over 20% during the month. Technology and semiconductor stocks bore the brunt of the sell-off, while defensive sectors outperformed. Our Alpha Picks generally underperformed. Trip.com (9961 HK) was the best performer at 0.5% mom, followed by Sino Land (83 HK) at -0.9% mom.
- November may see further market volatility, with the US midterm elections on 3 November. On a positive note, policy support for equities is stepping up. Broad-based A-share ETFs drew Rmb153.4b in the week of 19 October, their largest weekly inflow this year, while the PBOC carried out a Rmb100b swap operation for brokers and funds on 3 Nov 26 and cut the share buyback relending rate by 25bp to 1% on 4 November. Monetary and fiscal support is also continuing, with the PBOC moving to an overnight policy rate and Rmb800b of new policy financial instruments now fully deployed. We see a high probability of a bottom forming in November.
- We add CR Mixc (1209 HK), Inovance (300124 CH) and Weichai (2338 HK) to our BUY list. We cut losses on DiDi (DIDIY US).
Action
- Add CR Mixc (1209 HK) to our BUY list, on visible double-digit core net profit growth, five new mall openings in 4Q26 and 16 in 2027, and a 6.3% 2027 dividend yield backed by a 100% payout.
- Add Inovance (300124 CH) to our BUY list, due to its resilient 20% growth in general automation on AI-related and Apple supply-chain demand, margin recovery from 4Q26 as cost hikes are passed on, and progress in embodied AI.
- Add Weichai (2338 HK) to our BUY list, given its rising AI data centre genset volumes, with management guiding for more than 4,000 units in 2026 and more than 6,000 in 2027, first gas genset shipments in 4Q26 and a 6.4% dividend yield.
- Cut losses on DiDi (DIDIY US).
- Maintain BUY on Alibaba (9988 HK), ASMPT (522 HK), BYD (1211 HK), Foxconn Industrial Internet (601138 CH), Innovent (1801 HK), NAURA (002371 CH), NetEase (9999 HK), Sino Land (83 HK), Tencent (700 HK) and Trip.com (9961 HK).
Analyst
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