HSBC said Asian markets will look “very different” in 2025 given China’s new policy measures, India’s economic slowdown and Southeast Asian countries’ investment in new infrastructure. The investment bank’s analysts wrote in a Nov. 19 research note that a number of stocks could still “benefit from these changes in Asia, as they are best positioned to capture growth from these opportunities, and our analysts like to benefit from these changes.” From a bottom-up perspective.” They added that the stocks “outperformed the widely held consensus view and our goal is to highlight high-quality stocks that are relatively undervalued.” Here are three of HSBC’s top ideas. Meituan HSBC is optimistic about Meituan-Dianping and sets a target price of HK$220 (US$28.30) for the stock, giving the stock an upside potential of 25.8%. The investment bank classified the Chinese e-commerce giant as a “best-in-class large-cap stock,” saying it stood out for its “high-quality growth, improving profitability and limited competition.” Charlene Liu, head of internet and games research for Asia Pacific at HSBC Global Research, said: “Despite macro challenges, Meituan-Dianping’s growth momentum remains strong.” She said: “The quality of its earnings is the best in the industry. One.” Meituan’s revenue is expected to grow 20% in 2024 and 17% in 2025, she added. pointed out that Meituan is “relatively underrepresented” compared with other online peers, with only about 45% of global emerging market funds owning the stock. By comparison, tech giant Tencent is “owned by two-thirds of funds,” she added. Meituan-Dianping’s shares are listed on the Hong Kong Stock Exchange and traded in the United States in the form of American Depository Receipts (ADRs) under the stock code MPNGY. Krishna Institute of Medical Sciences (KIMS) The bank is betting on Krishna Institute of Medical Sciences (KIMS) in the small-cap space as more and more Indians invest in quality healthcare. Damayanti Kerai, India healthcare analyst at HSBC Global Research, calls it a “best-in-class small-cap” concept and believes the company is “well-positioned to sustain healthy growth.” This follows KIMS entering new markets with strong demand and specialty areas such as high-end surgeries such as transplantation and oncology. Kerai said the company also plans to expand bed capacity by 60% in fiscal 2025 to 2027. The analysts added that these moves “should help maintain healthy margins by improving its revenue mix”. KIMS’ shares are listed on the National Stock Exchange of India and the Bombay Stock Exchange. HSBC has a price target of 670 Indian rupees ($7.90) on the stock, implying an upside potential of about 19%. Kia HSBC also has South Korean carmaker Kia on its list, which it considers “the most valuable company in 2025.” Kia’s shares have been trending upward, rising about 8% in the past five days. “Recent stock price performance is a factor in escalating trade tensions, which may affect industry growth. However, it is unclear what type of policies the newly elected U.S. administration will implement,” Will Cho of HSBC Global Research Korea points out EV battery, automotive and technology analysts. He believes that “the market has underestimated the competitiveness of Korean companies in the electric vehicle and hybrid electric vehicle (HEV) fields.” Looking forward, Cho said that Kia’s “strong profit position can support its electrification plan, production and price will be more competitive” Affordable EV models, especially in the EU, should be more favorable to the regulatory environment from 2025 onwards. “This should help offset overall volume pressure, which is the main reason for Kia’s valuation discount,” he added. Success in the U.S. is likely to extend to the European Union through mass-market EV market share gains. Kia’s shares are listed on the Korean Stock Exchange and trade in the U.S. as American Depositary Receipts under the ticker KIMTF. HSBC has a price target of 160,000 won ($114.80) on the stock, implying an upside potential of nearly 63.1%. —CNBC’s Michael Bloom contributed to this report.
