< The 2016 All-Asia Research Team
He (Kevin) Yin,
Arnab Mitra & team
Credit Suisse
First-Place Appearances: 5
Total Appearances: 15
Team Debut: 2000
In second place on this lineup, which is newly carved out of the previously broad Consumer sector, are Arnab Mitra, He (Kevin) Yin and their Credit Suisse team. Last year Yin co-led (with Karim Salmatian) a group that merited a runner-up spot on the wider sector; he steers the firm’s Discretionary squad to the same position this year. In this space, one fund manager says, the researchers “provide us with solid corporate access and experts who have in-depth knowledge of the sector, which helps us to gain an edge in our investments.” A second backer offers that their coverage ably combines “top-down trend analysis and bottom-up individual stock selections. Stocks in the sector tend to have high valuations, and it takes good analysts to come up with effective stock picks.” In general, Credit Suisse expects demand for regional staples to pick up gradually this year. As Yin explains: “China will benefit from the low comparison base of anticorruption, India will see wage increases, [South] Korea will recover from the [Middle East respiratory syndrome] outbreak, Indonesia already bottomed out in the third quarter of 2015, and Thailand and Taiwan markets will get normalized.” Despite these positive drivers, though, “we think the recovery will be modest, narrow and bumpy, given a lack of strong catalysts and structural changes,” he adds. A top stock pick is Kweichow Moutai Co., a Chinese state-owned enterprise that produces spirits, food and packaging materials. The company “provides a visible recovery story, including private consumption picking up, healthy channel inventory levels, price increase potential, and first-quarter sales and earnings up 17 percent and 12 percent, respectively, year over year, as evidence,” says Yin. Its stock, rated outperform, trades at valuation-multiple levels similar to those of other leading Chinese players in the industry, while delivering profitability, cash flow and return on earnings, they advise. At 270 yuan, their price objective for Kweichow Moutai represents a 9.1 percent premium to its trading value in late April.
