- Is China a value investing opportunity?
- Money managers must navigate Sino-US tensions
Xi Jinping’s strategic tour of European capitals has been interpreted by some as China’s president probing for weakness in western alliances. Much is at stake, and geopolitical undertones have also deterred investors from Chinese capital markets, but are prices now low enough to justify the risk?
The manager of the Federated Hermes Asia ex-Japan fund, Jonathan Pines, thinks so. Speaking at the Morningstar Investment Conference earlier this month, Pines argued against treating China in the same way as Russia. As the world’s biggest exporter, China is far more integrated into the global economy, yet recent equity valuations seemingly imply no return to growth. Pines thinks that’s overdoing it, citing famous companies such as JD.com (HK:9618) and Alibaba (HK:9988), rated on price/earnings (PE) multiples way below 2020-21 highs.