There
may
be
a
lot
of
caution
with
investing
in
Chinese
stocks
—
but
asset
manager
Jason
Hsu
sees
opportunities
to
play
the
market.
“Chinese
stocks
are
trading
at
the
cheapest
they’ve
ever
been.
They
offer
such
a
big
discount
and
are
certainly
good
investments
within
a
portfolio.
There
is
a
risk
with
China
—
with
how
the
economy
will
take
form
—
but
with
stocks
being
so
cheap,
it
is
a
risk
worth
taking,”
Hsu,
who
is
the
chairman
and
chief
investment
officer
of
Rayliant
Global
Advisors,
told
CNBC
Pro
on
March
13.
“I’m
of
the
view
that
if
you
wait
around
for
the
uncertainty
to
be
over
–
the
opportunities
will
be
gone.
Everyone
is
sure
that
China
is
going
to
be
back
in
the
race.
So,
the
fact
that
there
is
a
lot
of
negative
sentiment
now
means
you’re
getting
a
big
discount
for
holding
on
for
future
growth
in
China,”
he
added.
The
Chinese
economy
and
stock
market
have
been
dogged
by
declining
foreign
investments
and
a
prolonged
property
market
slump.
But
things
could
be
about
to
turn
around
for
the
Asian
powerhouse,
which
left
behind
months
of
deflation
in
February
with
a
0.7%
year-on-year
rise
in
consumer
prices
.
Factory
activity
in
China
also
expanded
for
a
third-straight
month
in
January.
The
stock
market
has
also
been
picking
up,
with
the
Shanghai
Composite
Index —
which
hit
a
five-year
low
in
early
February
—
gaining
over
6%
in
the
past
month
to
cross
3,000.
Hsu
suggests
that
investors
allocate
around
7%
to
8%
of
their
portfolio
to
Chinese
stocks.
The
remaining
funds
should
go
toward
U.S.
stocks
(60%),
developed
markets
like
Japan
(20%),
and
other
emerging
markets
(12%).
‘A
great
growth
story’
When
it
comes
to
the
Chinese
market,
Hsu
views
state-owned
food
and
beverage
company
Kweichow
Moutai
as
good
short-term
play.
The
asset
manager
says
the
company
—
which
produces
liquor
—
has
“a
lot
of
brand
premium,
”
and
likes
it
for
its
“great
growth
story.”
“The
liquor
bottles
are
collectors’
items
and
they
are
always
sold
out
–
you
cannot
buy
them
on
the
company’s
website
so
you
can
only
get
them
on
the
grey
market.
They
increase
their
price
every
year,
but
people
still
buy
it,”
Hsu
said.
He
expects
the
company’s
margins
to
grow
as
demand
for
luxury
alcohol
grows
alongside
the
pick-up
in
the
Chinese
economy.
Given
the
“really
high
dividends”
that
Kweichow
Moutai
pays
out,
Hsu
added
that
it
makes
a
“relatively
safe
investment
in
the
currently
volatile
market.”
FactSet
data
shows
that
the
company
has
a
dividend
yield
of
2.6%.
Moutai’s
shares
are
down
nearly
2%
over
the
last
12
months,
but
have
risen
4.06%
over
the
last
three
months.
Of
the
40
analysts
covering
the
stock,
38
give
it
a
buy
or
overweight
rating
and
two
have
a
hold
rating,
according
to
FactSet
data.
The
analysts’
average
price
target
for
the
stock
is
2,158.53
Chinese
yuan
($300.30),
giving
it
25%
potential
upside.
Shares
of
Moutai
are
traded
in
the
Shanghai
Stock
Exchange
and
held
in
the
Pacer
CSOP
FTSE
China
A50
ETF
and
KraneShares
CICC
China
Consumer
Leaders
Index
ETF.
‘A
name
worth
investing
in’
A
longer-term
play
on
Hsu’s
radar
is
electric
vehicle
maker
BYD
.
The
Warren
Buffett-backed
company
has
been
making
headlines
amid
stiff
competition
with
its
U.S.
rival
Tesla
and
other
Chinese
automakers.
BYD
has
been
facing
regulatory
headwinds
in
the
U.S.
and
Europe,
but
Hsu
sees
this
as
a
short-term
challenge,
similar
to
what
Japanese
automaker
Toyota
faced
from
the
U.S.
authorities
“when
it
started
to
beat
everyone
in
terms
of
quality
and
better
prices.”
“Toyota
found
ways
around
it
by
moving
production
to
the
U.S.
And
we
now
see
BYD
taking
that
same
script
from
Toyota.
Today,
it
just
has
the
best
balance
in
terms
of
quality
to
price
in
the
consumer
discretionary
segment.
I
think
it
is
a
name
worth
investing
in,”
Hsu
said.
BYD
is
also
making
waves
with
its
recently
launched
electric
supercar
that
can
supposedly
hit
speeds
similar
to
high-end
models
produced
by
the
industry
race
carmakers
like
Ferrari
.
BYD’s
shares
are
up
4.7%
over
the
last
12
months,
and
about
3%
over
the
last
three
months.
The
automaker
is
listed
in
the
Hong
Kong
and
New
York
stock
exchanges.
Of
the
35
analysts
covering
the
stock,
33
give
it
a
buy
or
overweight
rating,
one
has
a
hold
rating
and
one
has
a
sell
rating,
according
to
FactSet
data.
The
analysts’
average
price
target
for
the
stock
is
304.53
Hong
Kong
dollars
($38.93),
giving
it
around
45.4%
potential
downside.
