< The 2014 All-China Research Team
(Karl) ChoiBank of America
Merrill LynchFirst-Place Appearances: 1
Total Appearances: 3
Analyst Debut: 2012Bank of America Merrill Lynch’s Cheong-Ga (Karl) Choi vaults from runner-up after two years to notch his first appearance at the top of this lineup, bumping three-time winner Simon Cheung of Goldman Sachs (Asia) down to No. 2. Choi, 42, joined Merrill Lynch in New York in 1994, armed with a bachelor’s degree in finance from New York University’s Stern School of Business. He moved to the Hong Kong office in 2008 and now reports on 19 Chinese conglomerates, with “a bold approach and a level head,” as one fund manager in Shanghai puts it. Choi has been somewhat negative on the prospects for the country’s largest conglomerate, Citic, whose business interests in China and worldwide range from the financial services and real estate sectors to energy, engineering, infrastructure and natural resources industries. In late August the Hong Kong–based company’s shares had risen 7.1 percent since his valuation-based downgrade from neutral to underperform in April, at HK$13.99, though they lagged the broad domestic market by 4.5 percentage points. The analyst then reiterated his position, noting that excitement over management’s reorganization of Citic and integration of its recent acquisitions had pushed the already too expensive stock price even higher. Sure enough, by late November it had receded to HK$12.86, for a loss of 8.1 percent since April. During the same period, China’s wider market climbed 5.3 percent. Looking ahead, Choi favors Hong Kong–based Hutchison Whampoa. While acknowledging that results for energy-related operations in the diversified provider’s portfolio have been battered by declining oil prices, he notes that its holdings in other industries are performing well, pointing to the stability of its utilities and retail businesses and solid balance sheet. The stock was trading at HK$97.75 in late November, and he forecasts a rise to HK$117. “Karl stays above the fray,” remarks another admirer.