Cheah Cheng Hye: Finding value in China

Malaysia-born Cheah Cheng Hye believes China's woes are already in the price.

Cheah Cheng Hye is not a familiar name in the West. But the co-founder of Hong Kong-based Value Partners "needs no introduction" to Asian investors, says Indira Vergis on Citywire.

The Malaysia-born journalist turned fund manager has built a stellar record over the past two decades, with his Value Partners Classic Fund returning over 2,000% since 1993.

A contrarian who cites John Templeton as a key influence, his firm now manages more than $11bn.

Today, Cheah is more bullish on mainland Chinese stocks than "at any time since the global financial crisis", says Bloomberg Businessweek.

This reflects attractive valuations (the Shanghai Composite index trades on a forecast price-to-earnings ratio of 9.4) and the long-term benefits of China's anti-corruption drive.

The latter will be a short-term drag on the economy, but should improve the quality of growth and increase confidence in the market.

While Cheah is "as scared as everybody else" about risks in China's banks and property markets, he believes that these are reflected in valuations.

Importantly, "there is little to no foreign debt, so [problems] can be restructured and controlled within the system", he tells Citywire.

Recommended

I wish I knew what an emerging market was, but I’m too embarrassed to ask
Too embarrassed to ask

I wish I knew what an emerging market was, but I’m too embarrassed to ask

This week's “too embarrassed to ask” explains what emerging markets are, and why you might want to invest in them.
9 Sep 2020
Bullish investors return to emerging markets
Stockmarkets

Bullish investors return to emerging markets

The ink had barely dried on the US-China trade deal before the bulls began pouring into emerging markets.
27 Jan 2020
Beware the hidden risks when investing in emerging markets
Investment strategy

Beware the hidden risks when investing in emerging markets

Emerging markets look cheap compared with developed countries, but earnings may be less trustworthy.
23 Dec 2019
How long can the good times roll?
Economy

How long can the good times roll?

Despite all the doom and gloom that has dominated our headlines for most of 2019, Britain and most of the rest of the developing world is currently en…
19 Dec 2019

Most Popular

The electric-car bubble could get an awful lot bigger from here
Renewables

The electric-car bubble could get an awful lot bigger from here

The switch to electric cars is driving a huge investment bubble. But that’s not necessarily a bad thing, says John Stepek. Fortunes will be made and l…
24 Sep 2020
Can Rishi Sunak’s winter plan save the UK economy?
UK Economy

Can Rishi Sunak’s winter plan save the UK economy?

With his Winter Economic Plan, chancellor Rishi Sunak is hoping to support the economy through the dark months ahead as restrictions tighten again. Jo…
25 Sep 2020
The rising dollar is proving bad news for most other assets – will it last?
Investment strategy

The rising dollar is proving bad news for most other assets – will it last?

Precious metals, stocks and pretty much every other asset has taken a tumble as the US dollar strengthens. Dominic Frisby looks at how long this trend…
23 Sep 2020