DJ MARKET TALK: HK Consumer Sector's Selloff A Buy Chance -JPMorgan
1126 [Dow Jones] JPMorgan says the sell-off of the consumer sector against solid fundamentals in the past two months, was mostly macro-driven.
And the de-rating has resulted in attractive valuations of 16.6X forward P/E for consumer discretionary sector (ex-sportswear), based on its "reasonably conservative" earnings estimates, below the sector's long-term average of 19X.
That said, "near-term volatility seems inevitable to us, in light of the increasing talk of slowdown from retailers and the consensus earnings cut."
JPM says as the share price generally reacts ahead of earnings revisions - around three months based on the 2008/09 experience - it sees good entry points for investors eyeing a long-term sustainable recovery cycle, which it expects to start early next year.
Its top picks remain Trinity (0891.HK), Golden Eagle (3308.HK), and I.T (0999.HK).
Source: Dow Jones Newswire