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Strategy & Economics: Portfolio Strategy

The 2010 All-China Research Team Rankings Released

Frank Li

Frank Li J.P. Morgan

The buy side says: “Li was the first to push autos, and he was right.”

Leading the roster is J.P. Morgan’s Frank Li, 41, who doubles as the firm’s director of China equity research; he also is ranked second in Consumer/Discretionary. Li, who earned an MBA from the Shanghai Institute of International Economics and Trade in 1993, stands out for warning clients that China’s red-hot property market was overheating.

Last August he told investors to reduce their exposure, and he cut Guangzhou R&F Properties Co. of Guangdong province from 2 percent to 0.5 percent of his model portfolio. The stock, then at HK$15.09, had plunged 34.6 percent, to HK$9.87, by the end of May. During the same period, China’s broad market slipped 6.2 percent. Li joined J.P. Morgan in 2002 from Indosuez W.I. Carr Securities.

Second Team

David Cui BofA Merrill Lynch Global Research

David Cui of BofA Merrill Lynch Global Research grabs second. Although he doesn’t rate individual stocks, last October he recommended coal producers such as Yanzhou Coal Mining Co., at HK$11.90, anticipating a rise in coal prices because of low reserves. Through late May the Jining, Shandong–based miner’s shares leapt 51.8 percent, to HK$18.06. In January, expecting tightening credit to affect infrastructure spending, Cui turned bearish on steel producers, including Anhui’s Maanshan Iron & Steel Co., then at HK$5.45. By late May the stock had plunged 30.5 percent, to HK$3.79. Cui “questions conventional wisdom, which is rare in China,” declares one ally.

Third Team

Thomas Deng Goldman Sachs (Asia)

In third place, Thomas Deng impresses investors with his “solid fundamental approach,” as one money manager puts it. Last October the Goldman Sachs (Asia) strategist highlighted likely beneficiaries of increased government health care spending, including Shandong Dong-E E-Jiao Co., a distributor of traditional Chinese herbs and alternative medicines headquartered in Dong-E County, Shandong, at 22.40 yuan. The stock had shot up a very healthy 65.6 percent, to 37.09 yuan, by the end of May. Deng “has thoughtful, forward-looking insights,” champions one client.

Runners-Up

Vincent Chan Credit Suisse; Lan Xue Citi

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