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<Research>Citi Lists 8 Potential Catalysts Ahead of 3rd Plenum; Top Picks PDD/ ASMPT/ CHALCO/ TTI/ MGM/ LI NING/ BYD
Recommend 32 Positive 31 Negative 24 |
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Citi Research noted in a report that the much-anticipated Third Plenary Session of the CCP Central Committee will be held from 15 to 18 July. The broker predicted exports and non-real estate infrastructure investment to remain the main driving forces of mainland China's economy in 2H24. The broker noted that although China is on track to achieve its 5% economic growth target this year, it expected that more time and policies will be needed to boost investor confidence, and it does not anticipate any major policy breakthroughs in 2H24 other than incremental measures. Citi is more bullish on stocks that can benefit from export growth and rising commodity prices. The broker's market top picks are PDD (PDD.US), ASMPT (00522.HK), CHALCO (02600.HK), TECHTRONIC IND (00669.HK), MGM CHINA (02282.HK), LI NING (02331.HK) and BYD COMPANY (01211.HK). Citi also listed 8 catalysts, which in order of probability are (1) structural reform, which is expected to affect key sectors such as power, real estate and insurance. (2) Cross-border trade in renewable energy and power grid equipment, automobiles and semiconductors. (3) Reform of state-owned enterprises in telecommunications, banking and insurance sectors. (4) Real estate relaxation measures to help the housing market, banking and insurance sectors. (5) Solving the problem of overcapacity in the solar energy, materials and semiconductor industries. (6) Consumer and internet industries to cope with the ageing population. (7) Consumption recovery in the consumer and internet industries. and (8) Development in internet, IT services and software industries driven by support measures for private enterprises. The broker currently forecasted the PBOC to cut interest rates once each in 3Q24 and 4Q24 by 10 bps each time, and its USD/CNY forecasts for the next 3 months and next 6-12 months are 7.25 and 7.35 respectively. AAStocks Financial News |
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