Chinese Equity Valuations At Attractive Levels, Despite Gloom

Amanda Cheesley

11 August 2023

After the end of the pandemic, the Chinese economy was supposed to be on the upswing again as usual. But Chinese exports slumped by 14.5 per cent in July, much more sharply than expected, David Perrett at London-based investment manager , said: "Despite yesterday’s deflationary data from China, we believe parts of China remain in a better economic position than many give it credit for. In July, domestic flight bookings and hotel bookings surpassed pre-Covid levels, indicating that domestic consumers are gradually shaking off the lockdown psychology to spur their return to more normal patterns of activity."

"The Chinese Communist Party (CCP) reinforced their intention to stimulate the economy in the July Politburo meeting. Little of this, however, has yet been priced in at an equity level, and Chinese stocks are continuing to trade at huge discounts to Western markets for what has been the best part of 20 years," he continued. Within these markets, Williams believes there are still businesses with strong fundamentals that are currently extremely undervalued.

His views have been echoed by Ronald Chan, founder and CIO of , an investment firm based in Hong Kong. He also thinks that there are hidden gems to be found in the country, for instance in healthcare, even though markets fell recently. “This provides a good opportunity to jump back into the market when things are cheap,” he said. See more here and here.