ASHR Stock Recent News

Chinese companies are being encouraged to return cash to shareholders - and are finding good reasons to do so. Regulators are encouraging companies to focus on shareholder returns, and changing macroeconomic conditions are making it easier for Chinese companies to pay dividends. Given the risks, we think an active investing approach is especially important when investing in high-dividend Chinese stocks.

The latest figures published by the People's Bank of China show that credit and liquidity are stalling as demand for new loans declines. Deteriorating confidence in China's prospects explains why households prefer paying down debts while companies borrow less.

Data came in generally in line or slightly weaker than forecasts, as weak confidence continued to depress investment and consumption. New home prices fell by -0.65% MoM in July, compared to a -0.67% MoM drop in June.

All hope is not lost for Chinese large-caps. Through the pessimism, the fundamental value here is hard to ignore. Also keep an eye out for technical support in the near-term.

Key economic indicators are mixed in China and, in fact, were mostly weaker than expected last month. So, policymakers are now stepping up support for the property sector in particular.

China's economy grew 5.3% in the first quarter of 2024, outpacing expectations. Despite the optimistic growth forecasts, contrarian economic data cast shadows over the long-term outlook.

Chinese stocks have been serial wealth destroyers in recent years. But there is a price for everything, and at current de-rated valuations, the risk/reward skews very favorably. Keep an eye out for more policy support to extend this year's rally.

China's near-term challenges and long-term uncertainties are plentiful, but the widespread pessimism towards the Chinese economy and markets feels excessive.

The PBOC held the 1-year medium-term lending facility (MLF) rate at 2.5% in March. The PBOC remains on a dovish tilt, but depreciation pressure on the RMB limits room for monetary easing in China before global central banks start to cut rates.

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