Best Research Ideas
The Year of the Horse: China Gallops into a Historic Bull Run
—Christie Ju, Head of Hong Kong & China Equity Research, and the Hong Kong-based analyst and strategy team
(Yu, Bu, Chiang, Darby, Guo, Leung, Li, Li, Meng, Tan)
The decision to pursue comprehensive reforms from the Third Plenum is very impressive with a significance rivaling that of Deng Xiaoping’s Open Door Policy in 1978, putting the nation on the cusp of a historic bull market. Chinese equity markets will test new highs in 2014 on increasing policy and implementation clarity. Jefferies recommends investors buy airlines, autos, banks, brokers, consumer staples, healthcare, insurance, Internet, clean energy and retail property, and avoid industrials, metals & mining, residential property, shipping, tech and telecoms.
Top Buys: Baidu, BOC, CITIC Securities, CRE, CMA, Dongfeng, Fosun Pharma, Huaneng Renewable, Sinopharm, PetroChina, Ping An and Shanghai Industrial. Top Underperforms: Agile, Belle, China Cosco, China Coal, CNBM, Digital China, Longfor, Zhaojin, Zijin and Yanzhou Coal. FULL REPORT