Read once the HIDDEN GEMS IN INDUSTRIAL STOCKS

The Hang Seng Index broke above 28,000 points once more, but it almost closed flat at the end of Tuesday (12 Sep).

Cheung Kong Property Holdings Ltd (1113.HK), Henderson Land Development Co Ltd (012.HK), Sun Hung Kai Properties Ltd (016.HK), and New World Development Co Ltd (017.HK) all faced arbitrage selling pressures.

But the good thing was that post arbitrage stock prices were still much higher than their levels before the sharp rise last Thursday.

Perhaps, this shows that the plan to build houses exclusively for Hong Kong first-time buyers at subsidized rates is still beneficial to the four above mentioned real estate developers, which also own farmlands.

I think these four stocks should see another round of speculation before Chief Executive Lam Cheng Yuet-Ngor’s policy address next month.

Hidden gems in industrial sector

I bought the shares of both Kingboard Chemical Holdings Ltd (148.HK) and Cathay Pacific Airways Ltd (293.HK) when the former bought many the latter’s shares.

Till this date, the share price of Cathay Pacific Airways has only increased slightly, while the share price of Kingboard Chemical has risen repeatedly at incredible magnitudes.

I thought it was an unexpected profit for me. Only after Kingboard Chemical’s results announcement did I realize that the “unexpectedness” was due to the fact that I haven’t been paying much attention to industrial stocks.

I had paid little attention to industrial stocks because I know quite a few Hong Kong industrialists who always say that factories don’t make money. Even if they do, it’s hard-earned money with blood, sweat, and tears.

Nowadays, in order for a factory to be profitable, there are high requirements for technology and invested capital. Indeed, Kingboard is ahead of its peers in terms of technology, and this forms the reason for its profitability.

Other companies, such as Sunny Optical Technology (Group) Co. Ltd (2382.HK) and Aac Technologies Holdings Inc (2018.HK) should be classified under industrial stocks as well.

However, the stock market currently classifies these two stocks under technology stocks, which explains the very high valuation.

For a long time in the past, people in Hong Kong had believed that high tech loses money while low tech makes money. But that’s because of the so-called “high tech” back then was actually still low-level technology.

Real high tech these days make big money, and in a monopolistic manner. Thus, investors should take note of industrial stocks with high-value technology.

Yuexiu Property stands to rise?

Many private-owned mainland property stocks registered good trends over the past year and reached a historical high.

Among which, Yuexiu Property Co Ltd (123.HK) is the slowest to start out and the slowest to turn losses into gains as well.

Considering that it is still quite a distance away from its peak during the 2015 rally, this distance could be a target for catching up in future.

Source - www.aspire.sharesinv.com