The 2014 All-Asia Research Team: Internet, No. 2: Jiong Shao & team
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The 2014 All-Asia Research Team: Internet, No. 2: Jiong Shao & team

Jiong Shao & team

Macquarie Capital Securities

First-place appearances: 0

Total appearances: 3

Team debut: 2012

Leaping from runner-up to second place is the three-strong Macquarie Capital Securities’ crew under the direction of Jiong Shao. Based in Hong Kong and Shanghai, these researchers garner praise for maintaining “the widest coverage of Internet and media stocks in China and for having great on-the-ground contacts,” in the words of one supporter. The region’s Internet software and services names soared 103.1 percent over the 12 months through April, trouncing the broader regional market by 94.8 percentage points, and this group is bullish on the sector overall, despite recognizing the rich valuation of some shares. “The key growth driver in the Internet sector in China is the offline-to-online transition. Unlike the West, China never really built up offline businesses in many verticals, and companies are now jumping directly into the online world,” says Shao, citing autos, real estate and travel as examples. Among the stocks these analysts recommend buying is China’s Vipshop Holdings, an online discount apparel retailer that they note has taken advantage of the lack of a brick-and-mortar retail network in China to position itself as the dominant player in the market for selling branded apparel at large discounts. Their target price for the New York Stock Exchange–listed shares is $200, implying an upside of 40.3 percent from their late April value. Another favorite is International. China’s No. 1 online travel agency benefits from both a rising Chinese middle class whose interest in travel is growing and an online penetration level of just 10 percent, compared with 40 percent in the West, Shao explains. Ctrip’s Nasdaq Stock Market–listed shares closed at $45.48 in late April, and the Macquarie team believes a price of $55 is justified.

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