Skip Navigation Links
Invest in China stocks
05 Dec 2022 (367 views)  

Here are the reasons why I invest most of my funds in China stocks.

1. Discount in Hong Kong
I can buy many good quality stocks in HKSE at a discount to the prices in Shanghai. The discounts are China Suntien (73%), Dynagreen Env (58%), SMIC (65%), Cosco Dev (63%).

2. Low price earning ratios
Many stocks have low PER, such as Cosco Holdings (1X), Cosco Dev (3.4X), China Railway (3.5X), ICBC (3.6X). I use a benchmark of 15X as the fair value of a stock. If the PER is less than 10X, it is grossly undervalued.

3. High dividend yield
I look for a dividend yield above 4%. The stocks with attractive dividend yield are Cosco Holdings (38.4%), Cosco Dev (25.7%), Sinopec (15.3%), ICBC (9%), China Mobile (9%). 
These are calculated based on the expected forward dividend, and may be not correct.

I extracted the figures from Yahoo Finance. Some of the figures may be wrong. I usually cross check the figures to make sure that they are reliable, before I invest in the stock. 

The performance of my China stocks have been poor in 2022 due to the lockdowns. However, I consider the stocks to be grossly undervalued, and the prices will recover when the lockdowns are lifted. It will come sooner or later.

At the current prices, the stocks represent good value.

Tan Kin Lian 


Invest in China stocks
[Back] [Print]


Here are the reasons why I invest most of my funds in China stocks.

1. Discount in Hong Kong
I can buy many good quality stocks in HKSE at a discount to the prices in Shanghai. The discounts are China Suntien (73%), Dynagreen Env (58%), SMIC (65%), Cosco Dev (63%).

2. Low price earning ratios
Many stocks have low PER, such as Cosco Holdings (1X), Cosco Dev (3.4X), China Railway (3.5X), ICBC (3.6X). I use a benchmark of 15X as the fair value of a stock. If the PER is less than 10X, it is grossly undervalued.

3. High dividend yield
I look for a dividend yield above 4%. The stocks with attractive dividend yield are Cosco Holdings (38.4%), Cosco Dev (25.7%), Sinopec (15.3%), ICBC (9%), China Mobile (9%). 
These are calculated based on the expected forward dividend, and may be not correct.

I extracted the figures from Yahoo Finance. Some of the figures may be wrong. I usually cross check the figures to make sure that they are reliable, before I invest in the stock. 

The performance of my China stocks have been poor in 2022 due to the lockdowns. However, I consider the stocks to be grossly undervalued, and the prices will recover when the lockdowns are lifted. It will come sooner or later.

At the current prices, the stocks represent good value.

Tan Kin Lian