Gw&k investment management is an investment management firm that specializes in emerging market investments. With China’s economy reopening and growth recovering, Gw&k sees attractive opportunities in Chinese healthcare and consumer stocks. Specifically, they favor pharmaceutical companies like Hengrui Medicine and vaccine maker Clover Biopharmaceuticals for their innovative pipelines. They also see strong potential in consumer discretionary names like KFC operator Yum China that stand to benefit from the comeback in consumption.
Gw&k favors Hengrui Medicine for its transformation into a biotech firm
Hengrui Medicine was formerly a generic drug maker but has upgraded itself into a biotech firm. It is now competing with companies like Hutchmed and Beigene to dominate China’s massive oncology drug market. With its strong existing revenue base and focus on innovative new drugs, Gw&k believes Hengrui is attractively positioned.
Gw&k is bullish on Yum China amid expectations of a rebound in consumption
With China reopening, Gw&k investment management expects consumption to rebound strongly just as it has in the West. They see particular potential in consumer stocks like Yum China, operator of KFC and Pizza Hut in China. As one of the most recognized foreign brands in the country, Yum China stands to be a prime beneficiary as Chinese consumers start spending again.
Gw&k sees risks around regulatory uncertainty for Chinese internet stocks
While optimistic on parts of China’s market, Gw&k investment management is cautious on Chinese internet giants like Tencent and Alibaba. Chinese tech regulation remains highly uncertain, and these stocks still trade at premium valuations. Thus, they believe there are better opportunities elsewhere in China’s market for now.
Clover Biopharmaceuticals presents an intriguing vaccine play
As a vaccine specialist, Clover Biopharmaceuticals could see significant growth potential over the long run. While its COVID vaccine was not a success, the company has over a dozen other vaccines under development and in trials. As one of China’s most innovative biotech companies, Gw&k believes Clover could emerge as a leader both domestically and globally in the vaccine space.
Gw&k investment management sees attractive potential in China’s healthcare and consumer sectors now that the economy is reopening. In particular, they favor pharmaceutical players like Hengrui Medicine and Clover Biopharmaceuticals for their innovative drug and vaccine pipelines. They also see upside for consumer discretionary names like Yum China as private consumption rebounds.