The trust aims to provide investors with access to a wide range of opportunities in China, leveraging the unique advantages of its structure, such as the ability to use gearing, invest in private companies, and employ derivatives. I look for firms with scalable growth potential, strong returns on capital based on a clear competitive advantage and strong management.
These often align with secular growth trends, but I pay close attention to cyclicality, as it can also present opportunities. I prioritise management teams with a proven record of strong execution and favour under-researched small- and mid-cap stocks capable of outperforming the market.
Where to invest in China
One company I have invested in is Medlive Technology (Hong Kong: 2192). It operates a leading online platform connecting pharmaceutical and medical device companies with doctors, providing medical information, clinical guidelines, and diagnostic tools.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Its core strength lies in digital healthcare marketing, and it is benefiting from the ongoing shift of healthcare budgets from offline to online channels. Medlive has demonstrated robust growth, with its client base and the number of products promoted rising significantly.
Despite recent anti-corruption crackdowns, the long-term outlook for drug and medical device development in China remains strong, driven by a shift from sales and promotion to increased investment in research and development.
As more new drugs are developed, pharmaceutical companies will require enhanced marketing support. Medlive, with its focus on precision digital marketing, is well-placed to benefit from this transition. With limited competition and ample reinvestment opportunities, Medlive remains a compelling long-term growth story.
Ping An Insurance (Hong Kong: 2318) is one of China’s leading financial services providers, offering a wide range of insurance and investment products. China’s insurance sector remains underpenetrated compared with Western markets, presenting strong long-term growth potential.
Ping An is well positioned to capitalise on this, benefiting from robust demand in life insurance, particularly in elder care and critical illness coverage. It is gaining efficiency through investment in technology and bolstering risk control through better asset-liability management, tighter underwriting standards and improving the sales force’s skills. Meanwhile, the stock is attractively valued at a discount to book value, with strong capital return policies delivering an appealing dividend yield.
Tuhu Car (Hong Kong: 9690) is China’s leading car services provider, leveraging digitalisation to transform customers’ experiences, standardise services, and drive efficiency. The company’s platform integrates booking, parts ordering, service tracking, and technical support, creating a highly scalable, capital-light model.
In a fragmented market dominated by small local players, Tuhu has consolidated its position as the largest player, with over 4,000 franchised stores. China’s ageing car fleet is fuelling demand for maintenance, and Tuhu’s scale – it is one of the world’s largest purchasers of tyres – gives it significant pricing power.
The group also has substantial scope for expanding its margins through private-label products, increasing offline traffic, and enhancing high-value chassis services. The trust first invested in Tuhu as a private company, so I’ve known it for a long time. With few direct rivals and a proven growth strategy, it still stands out as an attractive long-term investment.
This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.
-
6 taxes going up in 2025Inflation may be slowing and interest rates could be cut further, but households should prepare for higher tax bills next year - we look at the six taxes going up in 2025
-
Nationwide slashes interest rates on savings accountsNationwide has cut the rates on three savings accounts ahead of this week's base rate meeting. Are the rates still competitive?
-
MoneyWeek's shares editor explains how his trading tips fared in 2024My tips have yielded a profit and the open positions are proving lucrative, too
-
Share buybacks rise in the UK – what effect will it have?Share buybacks are gaining popularity in the UK – good news for investors
-
Should you bet on US stocks?You don’t have to be bearish on US stocks to worry that they are now such a large share of global indices
-
Is now the time to buy Marshalls?Former market darling Marshalls, a landscaping and building products supplier, looks too cheap. Is it time to buy this once-admired stock?
-
Top UK stocks with healthy cash flows and dividend yieldsThree promising UK stocks according to Alan Dobbie, co-manager, Rathbone Income Fund
-
Invest in Grainger: a landlord with growth potentialGrainger is putting years of uncertainty behind it and investing for expansion
-
UK equities are set for a bull market – buy nowInvestors shouldn’t wait for a crisis to buy UK equities, says Max King. Do so now, in the expectation of much better returns in due course
-
How to find top-quality income picks in the UK stock marketFour top-quality UK stock market picks according to Iain Pyle, manager of Shires Income Trust
