China’s recent economic growth fell short of the expectations, with a series of data well below market consensus and government targets, and the weaker-than-expected data should have reached the trough, with potential new policies expected to mitigate the downside, Citigroup said in a research note.
The long-awaited policy support from the central government should be around the corner ahead of the Politburo meeting scheduled to be held in late July, which should prevent the Chinese economy from further deteriorating, it said.
The broker listed infrastructure (clean energy and construction), consumption (electric vehicles, tourism, etc.) and technology (modernization and automation) as the sectors to potentially benefit most from potential government policies.
Xinyi Solar, Sunny Optical, BYD Company, Sands China and Chow Tai Fook are selected as the top picks in H-shares. Ratings and target prices of the stocks:
Xinyi Solar (00968.HK) ｜Buy｜11.5
Sunny Optical (02382.HK) ｜Buy｜110
BYD Company (01211.HK) ｜Buy｜602
Sands China (01928.HK) ｜Buy｜37
Chow Tai Fook (01929.HK) ｜Buy｜18.1