Goldman
Sachs
has
refreshed
its
“conviction
list”
of
top
picks
in
Asia
Pacific
for
March,
adding
some
key
stocks
and
removing
others.
The
bank
struck
an
optimistic
tone
on
the
region,
noting
that
its
markets
had
recovered
their
January
losses
and
were
now
trading
flat
year
to
date.
“Wide
market/sector/factor
performance
disparity
and
less
large
cap
bias
than
the
U.S.
reinforce
the
theme
of
intra-regional
opportunity,”
the
investment
bank’s
analysts
wrote
in
a
Mar.
3
note.
“Earnings
will
be
the
main
driver
of
share
performance,
given
that
valuations
that
are
broadly
in
line
with
macro
conditions.”
Key
trading
themes
on
their
radar
include
global
exposure,
earnings
delivery,
a
focus
on
value,
and
leveraging
opportunities
in
artificial
intelligence.
Here
are
two
of
the
latest
additions
to
Goldman
Sachs’
conviction
list:
Xero
Goldman
analyst
Kane
Hannan
said
he
was
positive
on
the
outlook
for
New
Zealand-headquartered
accounting
software
company
Xero
.
The
company’s
“pivot
to
profitable
growth
and
corresponding
earnings
ramp,
[provides]
an
attractive
entry
point
into
a
global
growth
story,”
he
said,
adding
that
Xero
is
a
preferred
large-cap
technology
name
in
the
Australia
and
New
Zealand
region.
Looking
ahead,
Hannan
believes
that
the
company,
with
its
refreshed
management
team,
“is
very
well-placed
to
take
advantage
of
the
digitization
of
SMBs
[small
and
mid-sized
businesses]
globally.”
He
said
one
challenge
faced
by
the
company
was
its
ability
to
compete
with
Intuit’s
Quickbooks
in
the
U.S.
and
with
Sage
in
the
U.K.
While
the
“market
opportunity
is
large
enough
for
multiple
successful
players,”
he
expects
the
debate
to
persist
over
time,
he
added.
However,
Hannan
remains
convinced
that
“Xero,
through
its
cloud-first
approach
(and
no
legacy
desktop)
is
well
positioned
to
compete,
and
through
its
management
refresh,
increased
product
cadence,
focus
on
an
open
ecosystem
&
partnerships,
is
well
positioned
to
compete
in
these
large
and
attractive
markets.”
Goldman
Sachs
has
a
price
target
of
$152
on
the
stock,
giving
it
potential
upside
of
around
12%.
Hyundai
Motor
Another
addition
to
Goldman’s
conviction
list
is
South
Korean
automobile
manufacturer
Hyundai
Motor
.
Analyst
Kota
Yuzawa
sees
the
company
gaining
from
a
“fundamental
improvement
in
U.S.
market
share
gains,
diversified
powertrain
strategy,
solid
EV
margin,
and
improving
shareholder
returns
[that]
aren’t
fully
appreciated
by
the
market.”
Yuzawa
said
risks
such
as
weakening
end
demand
and
an
EV
slowdown
were
“largely
priced
in,”
and
he
expects
the
market
to
re-evaluate
the
company’s
fundamentals,
“with
additional
potential
upside
from
corporate
governance
improvements.”
Looking
ahead,
the
analyst
expects
Hyundai’s
earnings
to
decline
in
2024,
but
says
“the
valuations
are
more
than
reflecting
this
slowdown
whilst
not
recognizing
Hyundai’s
structural
improvement
in
U.S.
market
share
and
multi-powertrain
strategy.”
Goldman
gives
the
stock
a
price
target
of
290,000
Korean
Won
($221.36),
implying
potential
upside
of
around
20%.
Meanwhile,
the
Wall
Street
bank
removed
Singapore-headquartered
bank
OCBC
and
Japanese
conglomerate
Sony
from
its
conviction
list
as
it
no
longer
deems
them
“a
top
investment
idea.”
—
CNBC’s
Michael
Bloom
contributed
to
this
report.
