Major Bank Rating | BOC International: JD.com and Alibaba are the top choices in the Chinese internet industry, while Chinese telecom stocks continue to attract attention
BOCI Research released a report stating that JD.com and Alibaba are the top choices in the Chinese internet industry, expected to benefit from the policy of replacing old home appliances with new ones and increased liquidity from the Shanghai-Hong Kong Stock Connect. The report mentioned that although the subsidies for replacing old home appliances have limited direct impact on the consumer electronics retail sector, they help boost consumer confidence. At the same time, Chinese telecom stocks remain attractive, with China Telecom and China Mobile having dividend yields of 5.7% and 6.5% respectively. ZTE Corporation has outperformed the broader market in the short term, but has a relatively high beta ratio
CICC International released a report stating that on September 25th, the National Development and Reform Commission held a meeting emphasizing the coordinated arrangement of 300 billion yuan of ultra-long-term national bonds to support the replacement of old consumer goods with new ones. The policies supporting the replacement of old household appliances with new ones have been fully implemented in all 31 provinces and regions, with local implementation starting in early August. The report indicates that although the 150 billion yuan subsidy for replacing old household appliances may not have a significant direct impact on boosting social retail sales, as household appliance retail sales only accounted for 1.8% of social retail sales last year, it is believed to help boost consumer confidence. The bank pointed out that JD.com and Alibaba are the top choices in the Chinese internet industry, and it is expected that they will be the main beneficiaries of the policy for replacing old household appliances and the increase in liquidity from the Shanghai-Hong Kong Stock Connect. In addition, the report mentioned that Chinese telecom stocks are still attractive. As of the Hong Kong closing prices on October 7th, China Telecom and China Mobile maintained dividend yields of 5.7% and 6.5% respectively. On the other hand, although ZTE Corporation has outperformed the broader market in the short term and has a relatively attractive estimated P/E ratio of 11.2 times for the 2025 fiscal year, its beta ratio is relatively high