Although some investors may be worried about the impact of the trade friction on China’s economy, one thing many would be pleased to know is that domestic demand remains resilient. As domestic demand continues to play a critical role in the Chinese economy, here are 3 stocks that ride on this theme.

[Related] 2 Consumer Staples Stocks to Play on China’s Domestic Demand

#1 Haier Electronics Group Co., Ltd. (1169.HK)

Haier is known for its household appliances, such as washing machines and water heaters. Haier’s strong brand name helps put the company in a favourable position among Chinese consumers. This allows the company to fend off competition from foreign brands. The continuous urbanisation of secondary and lower tier cities will drive demand for Haier’s products, strengthening its reach throughout the country. Given the growth prospects of this company, a P/E ratio of about 14 times appears to be very reasonable.

#2 Hengan International Group Company Limited (1044.HK)

Hengan is a leading manufacturer of daily care products in China. The company produces and sells paper products, such as paper towels, and women’s care products, such as sanitary napkins. Within the sanitary napkins space, there is a move towards higher quality products. Hengan has introduced more premium products which aim to improve users’ comfort. The stock is currently trading at a P/E ratio of around 15 times, below its historical levels which were usually above 20 times. Its dividend yield is also close to 5%, a respectable achievement for a company still in a growing phase.

Read More

#3 Tingyi (Cayman Islands) Holding Corporation (322.HK)

Tingyi (Cayman Islands) Holding Corporation, better known by its Master Kong brand name, produces and sells instant noodles, packaged drinks and other daily consumer goods. The company has been actively exploring higher end products, in line with consumption upgrading in China. The stock is currently trading at an attractive valuation with a P/E ratio of 20 times. This looks cheap compared to historical values of over 30 times. The company’s growth prospect remains strong due to robust domestic demand.

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like