CHINA
9 defensive stocks listed
China is soon to become the world first economy but still has a lot to grow to reach the same level of consumption and development as the West. Most investors can access Chinese stocks through Hong Kong or the US ADRs.
The tech stocks and major companies are good investments (I have held JD and Baidu) and well known so this section will focus on less known names.
CK HUTCHISON
Industry: Holding company
Defensiveness: Defensive (Ports, Convenience Retail, Telecoms, Energy, Infrastructure)
Accessible listing: Hong Kong
Concentration Risk: Medium, business is diversified, with surprisingly a lot of Europe exposure, with Asia and China as well
Growth: Low growth stock
Link: https://www.ckh.com.hk/en/ir/
Quick note: Good Assets but some are cyclical or regulated (Infrastructure). Should continue to grow value thanks to active management.
FIRST PACIFIC
Industry: Holding company
Defensiveness: Defensive (Food products, infrastructure and Telco), but regulation risk.
Accessible listing: Hong Kong
Concentration Risk: High, the business is concentrated in the Philippines and Indonesia
Growth: Low growth stock
Link: https://www.firstpacific.com/global/home.php
Quick note: Good Assets and discount but some are regulated by Duterte! (Infrastructure and Telco). Average management in the past, better focus on the core holdings now.
WANT WANT CHINA
Industry: Consumer goods
Defensiveness: Very defensive. Rice cakes, milk.
Accessible listing: Hong Kong
Concentration Risk: concentrated in China
Growth: No growth recently
Link: https://www.want-want.com/en/investor/
Quick note: Lack of growth for a consumer goods company is not interesting.
LAM SOON HONG KONG
Industry: Consumer goods
Defensiveness: Very defensive. Oils, Dough, Cleaning products
Accessible listing: Hong Kong
Concentration Risk: concentrated in China
Growth: Good growth to geographic expansion in China provinces
Link: https://www.lamsoon.com/
Quick note: Good and safe Garp stock
VITASOY
Industry: Consumer goods
Defensiveness: Very defensive, beverages, food.
Accessible listing: Hong Kong
Concentration Risk: concentrated in China, but expanding overseas
Growth: Good Growth in the past
Link: https://www.vitasoy.com/investor-relations/#/results-announcements
Quick note: Good growth, very expensive so did not analyse further
SINOPHARM
Industry: Drugs distribution and pharmacies
Defensiveness: Very defensive.
Accessible listing: Hong Kong
Concentration Risk: concentrated in China
Growth: Good growth by acquisition and organic.
Link: http://ir.sinopharmgroup.com.cn/html/index.php
Quick note: Lower drug prices regulation seems priced already in the stock. Builds a moat with scale and could counteract price decreases with geographic growth and efficiencies.
SHANGHAI PHARMA
Industry: Drugs distribution and manufacturing
Defensiveness: Very defensive.
Accessible listing: Hong Kong
Concentration Risk: concentrated in China
Growth: Good growth by acquisition and organic.
Link: http://www.sphchina.com/index/
Quick note: Lower drug prices regulation seems priced already in the stock. Builds a moat with scale and could counteract price decreases with geographic growth and efficiencies, as well as new drugs on the manufacturing side.
MODERN DENTAL GROUP
Industry: Healthcare
Defensiveness: Very defensive, makes crowns and bridges.
Accessible listing: Hong Kong
Concentration Risk: Low, Business is worldwide
Growth: Good growth by acquisition and organic.
Link: http://www.moderndentalgp.com/html/index.php
Quick note: Seems like a good growth business at the right price, with large addressable market.
JIASHILI GROUP
Industry: Food (Biscuits)
Defensiveness: Defensive, a brand, but small cap so not fully defensive.
Accessible listing: Hong Kong
Concentration Risk: Business is 100% in China
Growth: Growth by acquisition and organic.
Link: http://en.gdjsl.com/download.html?companfileCateId=3
Quick note: Very illiquid as a small cap, the business is on an interesting growth pattern