HSBC predicts that a “raft” of stocks will benefit from Southeast Asian infrastructure investments, a slower Indian economy and China’s stimulus blitz for 2025.
The investment firm believes that Kia Corp., Meituan and Krishna Institute of Medical Sciences are high-quality names underappreciated by the market. These companies “are best positioned” to capitalize on these growth opportunities.
Take a closer look at each one of these to see what they have in store for you as an investor.
Kia Corp (KRX: 000270)
HSBC has dubbed Kia’s stock as the “best play in 2025”, because investors have yet to appreciate how competitive Korean automaker Kia is when it comes to EVs, hybrids, and electric vehicles.
Will Cho, an analyst at Will Cho, expects Kia’s strong profit margins to be used to introduce more affordable and competitive electric vehicles in the next year. Kia’s first factory dedicated to EV production opened in October.
Investment firm believes that any weakness caused by Trump’s policy in the US will be offset in large part by gains in market share in the EU.
Will Cho’s recommendation to buy Kia stock, coupled with the price target of 160.000 Korean won, equates to an increase in value by 64%.
Krishna Institute of Medical Sciences
HSBC believes that Krishna Institute of Medical Sciences will benefit from the continued investment by Indians in health care next year.
The firm believes that KIMS is a small cap Asian stock “of the highest quality” and “well positioned” to “maintain healthy growth rates” over time.
Krishna Institute is expanding into new markets, including oncology, transplants, and high-end medical procedures. It also explores new markets in order to find new growth opportunities. The institute has committed to increasing its bed capacity in the coming three years by 60%.
HSBC says that these steps will “improve the revenue mix” and help to maintain healthy margins.
The firm’s price target of 670 INR on KIMS indicates a potential upside of about 14% from this point.
Meituan (HKG: 3690)
HSBC advises investors to invest in Meituan, a company that is regarded as a “best-in class large cap” and will benefit significantly from China’s recent policy changes.
This name is popular because the investment company has been resilient despite macro-economic challenges. HSBC cited in its bullish note this week “High quality growth, improved profitability and limited competition”.
Analysts expect Meituan’s top-line to increase by 20% in 2019 and 17% more in 2025. Analysts said that Meituan’s “earnings quality” is among the highest in the industry.
Meituan, compared to other internet companies of its size and scope is “relatively less owned” as I write. Tencent is owned by “two of every three” global emerging markets funds, while Meituan only has a fraction of that.
HSBC’s 220 Hong Kong Dollar price target for Meituan suggests that it may rise up to 30 percent from this point.
The post 3 Asian stocks undervalued to invest in by 2025 will be updated as new information becomes available.
