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<Research>Daiwa: Materials/ Industrial Stocks Outperform, Boosting A+H Shr Valuation Premium Strategy's Recent Relative Returns
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Daiwa published a research report indicating that it recently revisited its A+H share valuation premium strategy. The latest results showed that even when the valuation gap widened or the A-share market outpaced the H-share market, this investment strategy performed outstandingly. Over the past two months, cumulative relative returns of this strategy have increased from around 90% to 107.5%, which is believed to be driven by the rise in global metal prices and the recent renewal cycle of China's construction machinery. These tailwinds significantly benefited materials and industrial stocks, including CMOC (03993.HK) (603993.SH), ZIJIN MINING (02899.HK) (601899.SH), SANY HEAVY IND (06031.HK) (600031.SH), and WEICHAI POWER (02338.HK) (000338.SZ). Daiwa also highlighted that many overseas investors are still showing interest in Chinese tech companies. Due to geopolitical concerns, however, investors generally prefer holding H-shares. It is expected that foreign capital inflows will push up H-shares like CATL (03750.HK) (300750.SZ), whose market capitalization is much lower than their A-share counterparts. Once they complete dual listings, their share prices may rise rapidly, providing an opportunity for A-share revaluation. AAStocks Financial News |
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