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<Research>UBS: Top Pick Sectors Include Solar/ Chemicals/ Lithium on CN 'Anti-involution' Campaign
Recommend 38 Positive 58 Negative 20 |
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As the 'anti-involution' campaign in China expanded into areas such as healthcare and financial services, UBS surveyed its analysts on the extent and potential impact of recent 'anti-involution' actions across various industries, UBS published a research report saying. Although analysts' feedback mixed, judging from share price performance and the broker's interactions with investors, the market remained skeptical about the potential impact of these measures. Despite uncertainties about whether the current 'anti-involution' initiatives will achieve the expected results, the broker believed that the motivations behind these initiatives are still reasonable, and the stock price risk is skewed to the upside. Therefore, investors may selectively participate in this theme by investing in sectors with the most attractive risk-reward profile. Based on a combination of criteria including motivation, potential profit and valuation risk/reward, UBS' top pick sectors include solar, chemicals and lithium. UBS ranked sectors based on the following criteria: 1) motivation, i.e., the extent of disorderly pricing competition (the lower the profit margin, the stronger the motivation); 2) demand response and potential impact on prices and profit margins; 3) the extent to which the market has priced in. Based on the above criteria, the broker preferred solar, chemicals and lithium industries, with top picks in the solar supply chain including GCL TECH (03800.HK), TONGWEI (600438.SH) and LONGI GREEN ENERGY (601012.SH); top picks in the chemical sector include HUALU HENGSHENG (600426.SH) and HLGF (600346.SH); top picks in the lithium sector include SALT LAKE (000792.SZ). AASTOCKS Financial News Website: www.aastocks.com |
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