HSBC says Chinese markets are “coming out of the woods” following a series of government stimulus measures and lists its top stock ideas for 2025. Pay down debt. Here are two stocks HSBC likes: KE Holdings HSBC is bullish on real estate company KE Holdings (or Shell) and sees it as a major beneficiary of “China’s 2025 inflection point.” Oliver Yu, Asia real estate analyst at HSBC Global Research, said the stock “will benefit from a pickup in sales volume and stabilization of underlying house prices in 2025.” He added that KE Holdings “has the highest earnings sensitivity to a recovery in property sales in the primary and secondary markets”. HSBC’s optimism comes as the property sector shows signs of stabilizing after a slump over the past year. Goldman Sachs, Morgan Stanley and other institutions have said that they expect China’s real estate market to bottom out in the second half of next year. His comments came as Microsoft’s fiscal first-quarter results beat Wall Street expectations, with earnings per share of $3.30, compared with expectations of $3.10, and revenue of $65.59 billion, compared with expectations of $64.51 billion. Shell Holdings’ third-quarter results fell short of Wall Street expectations – adjusted earnings per American depositary share were 1.53 yuan ($0.22) – lower than the 1.57 yuan expected – while revenue reached 22.6 billion yuan, higher than expected of 23.46 billion yuan. Looking to the future, Mr. Yu believes that with the expansion of market share, Ke Holdings’ profits will continue to expand, and its new home decoration and rental service business will expand rapidly. KE Holdings’ shares are listed on the Hong Kong Exchange and trade in the United States as American Depository Receipts (ADRs) under the symbol BEKE. HSBC sets a price target on the stock of $34.30, implying an upside potential of approximately 71.7%. HSBC is also optimistic about Hongfa Technology and has set a target price of 48.10 yuan ($28.30) for the stock, with an upside potential of about 50%. HSBC calls the stock “a leading manufacturer of industrial automation equipment, solar inverters, relays and other automotive parts” and believes it will drive structural growth in mainland China. Corey Chan, head of A-share industrial and renewable energy research at HSBC Qianhai Securities, expects the company to benefit from the use of modularization (or breaking down systems into smaller components), especially OEMs or original equipment manufacturers in the automotive industry . “Hongfa is well-positioned because of its leading position in the automotive relay market and its ability to supply a variety of other automotive parts such as connectors, film capacitors, inductors and fuses,” Chen explained. Jufa shares are listed on the Shanghai Stock Exchange is listed and trades in the iShares Global Tech ETF (18.7% by weight) and the Fidelity MSCI Information Technology Index ETF (17.2% by weight). —CNBC’s Michael Bloom contributed to this report.
HSBC has selected 2 Chinese stock picks for 2025, one of which has more than 70% upside potential | Real Time Headlines
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