< The 2016 All-Asia Research Team
Huaxiang (Edward) Xu,
Ran (Richard) Xu & team
Morgan Stanley
First-Place Appearances: 1
Total Appearances: 9
Team Debut: 2000
For the first time, investors and buy-side analysts name Morgan Stanley the top provider of research on Chinese equities, sending Bank of America Merrill Lynch down to No. 2 after four straight trips to this winner’s circle. The 50-strong team works out of Hong Kong and held second place in 2015 under the leadership of Hong (Helen) Qiao, who moved to BofA Merrill in October and co-captains that firm’s squad this year. Now Ran (Richard) Xu and newcomer Huaxiang (Edward) Xu direct Morgan Stanley’s coverage. Richard Xu debuted on this roster in 2014, as Qiao’s co-leader, and has been with the firm since August 2012, signing on after covering Chinese financials at Goldman Sachs (Asia) and U.S. regional banks at J.P. Morgan. He holds a bachelor’s degree in finance from St. John’s University in New York. Edward Xu joined in July 2004, after earning a BA in English and information management at Beijing Foreign Studies University and an MBA at the University of Illinois at Urbana–Champaign. This year he also oversees the No. 1 group on the Transportation lineup and co-leads, with Kevin Luo, the first-place crew on the Industrials list. In this space the analysts keep sites on 490 stocks. They ”offer big-picture views, which are helpful for those of us not familiar with Chinese markets, and are prolific and diligent on company research,” one fund manager attests. Among the group’s favorites is China Aviation Optical-Electrical Technology Co., a Henan-based avionics-components manufacturer that the analysts added to their sector portfolio in September 2014. Citing such drivers as the company’s exposure to the lucrative electrical-connectors and optical-device markets, they assigned China Aviation an overweight rating. As of late last month, the shares were trading at 35.84 yuan, having posted an 84.6 percent gain during a period in which China’s broad market tumbled 12.7 percent. They remain recommended with a price target of 51 yuan. Morgan Stanley’s crew was ”early in systematically analyzing the logistics value chain and recommending high-performing stocks,” remarks another investor.