The initial shock from the global economic crisis may have had an exaggerated effect on the Chinese economy, especially affecting the stock market.
However, even without OPEC’s latest report indicating that oil prices will definitely rise in the long run and the short period of the false hope that was given by the Feds a week ago, there is little doubt that recovery will eventually occur and with it many stock prices will be as high as they used to be, if not higher.
With that out in the open, InvestAsian believes that a few great companies will be leading the recovery when the time comes.
The modern telecommunication infrastructure is an essential element to any economy and society, and China is no exception.
Beijing Xinwei Telecom Technology Group Co. Ltd
The biggest company in the telecom technology industry, in terms of market capitalization, Xinwei Telecom is a communication enterprise group based on the research of communication technologies. It is in the business of installing and maintaining communication network monitoring and testing systems.
Founded in 1995 and successfully listed in 2003, Xinwei Telecom is the only group in China that owns many national and ITU communication standards with great reputation in the international communication field as well.
With unrivaled commitment to provide world-leading wireless communication technologies, products and services, Xinwei Telecom aims to become a top three industry leader across the globe.
Xinwei Telecom is a Top Performer
Not only is the company leading the industry in terms of market capitalization, its financial performance and company fundamentals are undoubtedly the best among its peers as well.
Boasting the highest profits in the industry, the company’s performance has been exceptionally well. The outstanding amount of profits not only comes from the company generating the second highest revenue in the industry of nearly 3 billion yuan (~US$460 million), but also from its operating efficiency. With over 90% gross margin and 60% net profit margin, Xinwei Telecom has the highest 2014 net income in the industry at nearly 2 billion yuan (~US$305 million).
With such strong financial performance, their operating metrics are also the best and their shareholders are enjoying the benefits. With returns of 18% ROA and 24% ROI, Xinwei Telecom displays the best operating metrics in the market.
The shareholders are also ecstatic as the company has the sector’s highest earnings per share as well as the lowest P/E ratio.
When looking at the fundamentals, Xinwei Telecom is second to none. With a current ratio of close to 4 and extremely low debt ratio, the company will not be in any foreseeable financial danger in the short term future.
… and Obviously a Strong Buy
InvestAsian believes that this company will be leading the industry in the recovery phase as well.
Currently it is just trading at a 27.57 CNY, a mere shadow of what it used to be. It peaked 6 months ago at more than 60 CNY.
With great fundamentals and financial performance, there is no reason not to believe that the stock price will rebound.
The recent opening of the Hong Kong-Shanghai Stock Connect allows individual foreign investors to buy shares listed in mainland China for the first time.