Industries: Consumer/Discretionary

The 2010 All-China Research Team Rankings Released

Yankun Hou

Yankun Hou

Yankun Hou Nomura

The buy side says: “He is a self-disciplined, dedicated, client-oriented person.”

Taking the pole position is Nomura’s Yankun Hou, who impresses investors with his “thorough knowledge” of the automobile industry, in the words of one fund manager. That knowledge was on display in Hou’s reports on Denway Motors, which he believed was poised to suffer through 2009 because of a limited product lineup, constrained growth potential in 2010 and an inflated royalty fee to Honda Motor Co. Hou downgraded Denway’s stock from neutral to sell last August, at HK$4.30. Shares of the auto-parts manufacturer, which is headquartered in Hong Kong, screeched to HK$3.30 through May and trailed the sector by 35.5 percentage points.

Hou, 39, earned an MBA from Ithaca, New York’s Johnson School at Cornell University in 2005 and then joined Lehman Brothers Asia as an equity analyst covering Chinese autos and auto parts; Nomura acquired Lehman’s Asian operations in the fall of 2008.

Second Team

Frank Li J.P. Morgan

In second place is Frank Li, who “caught the turning point in the auto sector exactly right,” observes one impressed backer. The J.P. Morgan analyst, who also is ranked No. 1 in Portfolio Strategy, urged clients in January 2009 to buy shares of Wuhan, Hubei–based Dongfeng Motor Group Co., at HK$2.50, saying demand for cars would surge as disposable income continued to rise. The stock had zoomed to HK$9.47 by late May 2010, a stunning 278.8 percent gain.

Third Team

Kate Zhu Morgan Stanley

Kate Zhu comes in third. Clients say the Morgan Stanley analyst “has sound fundamentals on her sector” and offers “strong arguments from both a top-down and bottom-up point of view.” One of these strong arguments dealt with Weifang, Shandong–based Weichai Power Co., China’s largest manufacturer of diesel engines and auto accessories. Zhu, who also ranks second in Industrials, upgraded the stock from neutral to buy in October, at HK$49.65, citing strong earnings growth. The stock was up 16.5 percent by the end of May, to HK$57.85.


Gerwin Ho Citi; Xiaopo Wei CLSA Asia-Pacific Markets

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