The 2014 All-China Research Team: Basic Materials, No. 1: Zheng Gao


< The 2014 All-China Research Team


Zheng GaoChina International
Capital Corp.First-Place Appearances: 2

Total Appearances: 3

Analyst Debut: 2012Zheng Gao of China International Capital Corp. repeats in first place. Working from Shanghai, she monitors 40 Chinese basic materials companies — up from 30 a year ago. “Her suggestions help our company make money,” reports one portfolio manager. What’s more, “even some CEOs seek Zheng’s insights,” one buy-side analyst in Shanghai adds. Gao’s key stock picks over the past year include her calls on Sailun Group Co., which is based in Qingdao and manufactures radial tires, and Beijing’s Fufeng Group, a leading producer of such food thickeners and synthetic flavor enhancers as xanthan gum and monosodium glutamate. She began reporting on Sailun in February 2013 and on Fufeng that October, assigning a buy rating to each name. Her positive outlook on Sailun was thanks largely to growing Chinese demand for the company’s semisteel tires, and sure enough, by late last month the stock had rocketed 95.2 percent, to 17.53 yuan, while domestic basic materials shares tumbled 22.7 percent. Fufeng was benefiting from price hikes and margin expansion, she advised last October. Its shares subsequently leaped 50.2 percent, through late November 2014, climbing to HK$4.34 and besting the sector by 53 percentage points. Going forward, Gao favors Qinghai Salt Lake Industry Co., a Qinghai-based agricultural chemicals producer, crediting rising international need for fertilizer. The stock was trading at 21.27 yuan in late November, and she forecasts a rise to 23 yuan. “Zheng is diligent and objective,” a third supporter insists, “and she has true insights.”