It is tough to select stocks that can perform well in the long run. While large cap stocks may not be able to make you rich in a short period of time, they may be easier to analyse by just looking at the fundamentals.

Read More: These Banking & Property Stocks Lead Hong Kong Market Higher

Investors who are new to the market are generally better off sticking to well-known large cap stocks with strong brand recognition as they start off on their investing journey versus  under-the-radar small cap stocks which require both fundamental and technical analysis. Let’s start with two that are particularly good for beginner investors because of their strong balance sheets, positive free cash flows, and competitive advantages:

#1 Kerry Logistics (636.HK)

Kerry Logistics Network Ltd (636.HK) is a hidden gem that usually gets overlooked. It’s trading at a price-to-earnings ratio of 9x while both revenue and operating profits have been growing in the 10-20% range, respectively, over the past four years. However, management still expects double-digit growth in what’s been a difficult 2019.

Benefiting from the relocation of manufacturing sites from China to neighbouring Asian countries over the past two years, Kerry Logistics has taken the opportunity to expand its network coverage in Southeast & South Asia, and thus further consolidate its dominant position in Asia. Owing to the US-China trade war, management expects intra-Asia trade will be the main growth driver in years to come.

[Related] Kerry Logistics to explore F&B sector with the establishment of Kerry Coffee

The operation performance of its crown jewel, Kerry Express Thailand, remained robust thanks to booming e-commerce consumption in Thailand. What’s more, it’s expanding its express delivery operations in Malaysia, Vietnam, and Indonesia – hoping to replicate its success from Thailand.

The stock has been on the uptrend and it is currently traded at 13.02 HKD (at the time of writing)

#2 Café de Coral

Café de Coral Holdings Limited (341.HK). The company has got a solid track record of providing fast and great value meals to the masses. Perhaps less obviously, it could also potentially benefit from the de facto boycott/disruption of Maxim Group’s fast-dining restaurants (that range from conveyor-belt sushi operator Genki Sushi to the widely-recognisable Starbucks) in Hong Kong – with the group having been singled out as being “anti-protestor”.

Couple that with a rock-solid balance sheet, growing dividends and a growth strategy that taps into the overall expansion of Southern China’s prosperous “Greater Bay Area”, and you have all the components for continued long-term growth. At its current share price of HK$21.5 (as at the time of writing), Café de Coral’s shares are trading at an attractive 12-month trailing dividend yield of 3.9%.

The share price rebounded in the beginning of October and is currently traded at 21.5 HKD.

Click here to discover more F&b stocks: 3 Food & Beverage Stocks with Strong Potential


[1] Motley Fool:

Leave a Reply

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

You May Also Like