The Hong Kong Stock Exchange offers perhaps with U.S. markets the best investment opportunities in the coming years. Below I discuss the analysis I have undertaken of the most interesting companies in this market.
1.-Cheung Kong Limited 長江實業
The good performance of Hong Kong economy’s makes this conglomerate a good investment opportunity for the long term. Increased demand for land for office and retail space in the future will drive the company sales. The group has direct stakes in groups like Hutchison Whampoa Limited., Cheung Kong Infrastructure Holdings Limited, CK Life Sciences Interntaional, TOM Group Limited, iMarkets Ltd, iBusiness Corporation Limited, CK Communications Ltd, Excel Technology International Holdings Ltd, mReferral Corporation Limited or Beijing Net-Infinity Company among others. Net sales to increase by 41% in the 2012-2016 term to reach 45167 million HKD.
2.-CLP Holdings Limited 中電集團 中電控股有限公司
Also known as China Light Company, the company has exposure to countries with good economic prospects (Australia, India, Laos, China, Philippines, Taiwan or Thailand among others). Perhaps the biggest positive surprise of the group can come from the Gujarat Paguthan Energy Corporation Indian company, acquired in 2002. This year the company opened a new generation plant in Jhajjar, Haryana due to increased demand for electricity in India. Net sales to increase by 24% in the 2012-2016 term to reach 117415 million HKD.
3.-Hong Kong and China Gas Company Limited (Towngas) 香港中華煤氣有限公司
The company is the main gas distributor in Hong Kong (with market share of 85%) and China. The company has a 15% stake in International Finance Centre, a company dedicated to commercial development in Central Hong Kong, currently a high demand area looking for the future. Net sales to increase by 43% in the 2012-2016 term to reach 36174 million HKD.
4.-The Wharf Holdings Limited 九龍倉集團
The company has been expanding its activities over the years to become today one of Hong Kong’s biggest conglomerates. Its main asset is the historic Star Ferry in Hong Kong, as well as several properties in the city center or the second largest container port in Hong Kong among others. Increased trading activity will boost the Group’s accounts in the coming decades, winning over future land revaluation of properties in the city. Net sales to increase by 46% in the 2012-2016 term to reach 46291 million HKD.
5.-Power Assets Holdings Limited 電能實業有限公司 香港電燈集團有限公司
Formerly known as Hongkong Electric Holdings Limited, the company is now the largest distributor of electricity in Hong Kong and the only energy provider along with CLP Holdings Limited. The expected population growth in Hong Kong benefit the company, making this stock a good investment against possible financial market turmoil. Net sales to increase by 13% in the 2012-2016 term to reach 12349 million HKD.
6.-MTR Corporation Limited 地下鐵路公司
The main operator of rapid-transit systems in Hong Kong has ambitious plans for the future. The group, which initially operated the Hong Kong rail system, is today a global operator of transport systems in cities around the world such as London, Shenzhen, Hangzhou, Melbourne, Stockholm or Beijing among others. The expansion plans of the transport system in Hong Kong with their properties and shopping centers make the company a good bet for the future. Net sales to increase by 29% in the 2012-2016 term to reach 46124 million HKD.
7.-China Petroleum & Chemical Corp. (SINOPEC) 中国石油化工股份有限公司
The second largest Chinese oil company (only behind the state-owned China National Petroleum Corporation), is also the sixth largest company in the world by net sales. The group has diversified its drilling portfolio in recent years with several companies purchases in Canada, and the purchase of 30% of the largest oil reserves found in the western hemisphere since 1976 from Galp Energia SGPS SA (Portugal) for $5.2 billion. Undoubtedly one of the best players in the oil sector for the long term. Net sales to increase by 45% in the 2012-2016 term to reach 3714882 million HKD.
8.-China Overseas Land & Investment Ltd. 中國海外發展有限公司 中国海外发展有限公司
The subsidiary company of China State Construction Engineering Corporation (CSCEC) (中国 建筑工程 总公司) is today one of the largest construction and property companies in China, Hong Kong and Macau. The higher demand of properties in China in the coming decades due to the growing demand makes this company one of the best investment options to invest in urban development in the Asian country. Net sales to increase by 65% in the 2012-2016 term to reach 110468 million HKD.
9.-Tencent Holdings Ltd. 腾讯控股有限公司
Media conglomerate based on Guangdong (China), has great potential for growth due to the expanding use of new technologies by Chinese society. Actually, the group is a world reference, only Google and Amazon have a higher market value in internet sector. Due to the size of the company, it has made several purchases in recent years, such as buying a particpiacion at Epic Games, developer of franchises like Gears of War and Infinity Blade. Also, the company bought Riot Games (developer of League of Legends), for $ 400 million USD in 2011. Net sales to increase by 134% in the 2012-2016 term to reach 103471 million HKD.
10.-CNOOC Ltd. 中国海洋石油总公司
The third largest oil company in China has successfully closed the acquisition of the Canadian oil and gas company Nexen Inc. for $ 15.1 billion as China’s largest foreign deal in the history of the country (transaction approved on 7 December, 2012 by the Canadian Federal Government). With this transaction, the group diversifies and gain resources areas in areas such as North Sea in Europe, Colombia, the Gulf of Mexico, or Alberta’s Athabasca Oil Sands among others. CNOOC is currently an global energy group, so the growing consumption of energy worldwide will benefit the Chinese group. Net sales to increase by 8% in the 2012-2016 term to reach 266174 million HKD.
11.-Hengan International Group Company Limited 恆安國際集團有限公司
As any growing economy, increased consumption of all types of goods, increase also non-cyclical considered products (main business of to the group). The Chinese middle class, now very large and growing, is the reason why sales have skyrocketed these last years. This trend will continue in the future, so it seems like good choice Hengan within the chinese non-cyclical consumer sector. Net sales to increase by 84% in the 2012-2016 term to reach 37188 million HKD.
12.-China Resources Land Ltd. 华润置地有限公司
As the name suggests, the company is focused on developing properties in China. Among the projects that are currently developing, the company has presence in all major cities in China, such as Beijing, Shanghai, Shenzhen, Chengdu, Wuhan and Hefei, Hangzhou, Wuxi, Dalian, Ningbo, Changsha, Suzhou, Chongqing or Shenyang among others. The future of the company can be the properties management, a growth business for the mid-long term. Net sales to increase by 99% in the 2012-2016 term to reach 88762 million HKD.
13.-Belle International Holdings Limited 百丽国际控股有限公司
The largest shoe retailer for women in China has a fast growing market segment. The growing Chinese domestic demand boosts sales of the group leading brands (Belle, Staccato, Teenmix, Tata, Fato, panama, Joy & Peace and Bata) year after year, and it’s for this reason that the company currently has nearly 4,000 stores in different chinese cities. The future of the group is obtain the entire control of production chain and sale process, as did other large fashion groups such as Spanish Inditex to improve its operating margins. Net sales to increase by 73% in the 2012-2016 term to reach 58321 million HKD.
14.-BOC Hong Kong Holdings Ltd. (Bank of China Hong-Kong) 中銀香港(控股)有限公司
The division of Bank of China in Hong Kong has one of the strongest balance sheets in the region. Due to the growth of the city over recent years, the group has a strong and healthy balance facing the promising future of the region due to financing export projects in Hong Kong area. Net sales to increase by 48% in the 2012-2016 term to reach 53187 million HKD.
15.-AIA Group Limited 美國友邦保險
The multinational insurance company based in Hong Kong has a presence in countries with huge growth prospects for the future. GDP continued growth makes the company’s operating regions as Taiwan, China, Australia, New Zealand, Japan, India, Sri Lanka, Malaysia, Macau, South Korea, Thailand, Philippines, Singapore, Brunei or Vietnam net job creators for the coming decades, benefiting AIA from these social-demographic trends in the future. Net sales to increase by 36% in the 2012-2016 term to reach 22817 million HKD.
16.-Sands China Ltd. 金沙中國
Although older developments are already made, the company still has a land in which to build a new casino in Macau, which connect directly with other two casinos owned by the company: The Plaza Macau (opened in 2008) and The Venetian Macao (opened in 2007). The subsidiary of Las Vegas Sands, has two more properties in Macau: Macau Sands (opened in 2004) and Sands Cotai Central (opened in 2012). The company has potential due to Asia growing middle class. Net sales to increase by 98% in the 2012-2016 term to reach 12173 million HKD.
17.-Want Want China Holdings Ltd. 中國旺旺控股有限公司
The food company has increased its sales. With healthy balance sheet the company is well positioned for the long term. These two reasons will drive up the shares price of the subsidiary company of Want Want Taiwan. Net sales to increase by 89% in the 2012-2016 term to reach 6813 million HKD.