Chinese economic weakness has been the primary concern for global investors in recent months. However, a new report by CLSA analyst Elinor Leung discussed one segment in China that is still seeing rapid top-line growth: Internet companies.
Twenty-five Chinese Internet companies attended CLSA’s Investors’ Forum, and Leung summarized the key takeaways from the forum and named CLSA’s top stock picks in the space.
Impact Of A Slowing Economy
Despite weak economic numbers and plummeting share prices, Leung noted that many Chinese Internet companies have seen very little change in their revenue growth trajectories. In addition, the market weakness in China could actually end up helping the larger Chinese Internet companies in one unexpected way.
“Listed companies could benefit from a weak A-share market, as small companies cannot access financing and the weak market accelerates consolidation,” Leung explained.
Companies attending the Investors’ Forum cited high savings rate, increasing consumer spending power and gains in off-line market share as top reasons many of the companies have avoided a major impact from the downturn in China.
Top Names
According to Leung, Alibaba, which has seen a 41 percent decline in share price so far this year, reported…
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