Analysts’ recommendations
Analysts have been bullish on the technology sector in China based on favorable demographics and a growing Internet population. Chief Strategist of Capital Link International, Uwe Parpart told Bloomberg in an interview, ““There’s no question that the technology penetration of the Chinese mainland has been amazing,” “More penetration of IT than probably anywhere else in the world. From banking to everything else. Why not stay with that?”
Meanwhile, manager of the Wells Fargo Advantage Emerging Markets Equity Fund, Derrick Irwin thinks China presents a golden opportunity for “well-run” tech companies. “If we look across the tech space in China, we think there’s some very good long-term opportunities there.”
Analysts’ estimates tend to drive short-term movements of stocks. Changes in ratings and estimates guide investors towards what markets are expecting from a particular company.
The table above lists the ratings and 12-month target prices of some large-cap stocks in India.
Analysts are most bullish on big names like Alibaba (BABA), Tencent Holdings (TCEHY) and Sunny Optical (2382.HK) as these stocks have received the highest buy ratings, and few sell ratings. Bitauto Holdings (BITA) has a consensus target price of $26.31 resulting in a return potential of 21% over the next 12 months, highest among its peers.
Analysts are most bearish on Lenovo Group (LNVGY), Coolpad Group (2369.HK), and Fang Holdings (SFUN) as these stocks have received the highest number of sell ratings. Lenovo has received just 5 buy ratings, 15 hold ratings, and 10 sell ratings while Coolpad Group has received no buy ratings, 5 sell ratings and 1 hold ratings Fan Holdings has received 5 buy ratings, 4 hold ratings, and 3 sell ratings. These stocks have a return potential of 11.6%, 20%, and 1.8% respectively over the next 12 months.
