The 2014 All-Asia Research Team: Consumer, No. 1: Young-Ah Han, Chen Luo & team
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The 2014 All-Asia Research Team: Consumer, No. 1: Young-Ah Han, Chen Luo & team



Young-Ah Han,

Chen Luo & team

Bank of America

Merrill Lynch

First-Place Appearances: 4

Total Appearances: 8

Team Debut: 2007

It’s four years in a row in first place for Bank of America Merrill Lynch. The 12-strong squad directed by Seoul-based Young-Ah Han, 43, and 37-year-old Chen Luo, who works out of Hong Kong, covers 74 Asian consumer stocks, down from last year’s 100, but expects that number will rise again in 2014. Although the sector rose 12.5 percent over the 12 months through late April, beating the region’s broad market by 8.7 percentage points, Han says these companies are facing structural challenges — mainly in their need to meet e-commerce and oversupply challenges. “To address these issues, they are undergoing a paradigm shift,” she advises. “They are shifting their focus from distribution and networks to merchandising, supply chain and consumer orientation.” One name that the BofA Merrill troupe believes is up for the challenge is Hong Kong–based Gome Electrical Appliances Holding. The researchers upgraded the household goods and consumer electronics retailer from neutral to buy in August, at HK$0.76, citing earnings momentum and valuation. They reiterated that position in October, with the shares up 48.7 percent and ahead of the sector by 38.4 percentage points. By late April the stock had jumped 28.3 percent higher, to HK$1.45, while the sector was nearly flat. Even still, they foresee further upside, maintaining a target price of HK$1.68. Gome, they note, has sustained its solid earnings momentum and boasts core competency in its supply chain as well as an attractive open omnichannel strategy. Clients appreciate the analysts’ “deep understanding of the consumer sector in China,” in the words of one fund manager, who adds that they “think about a business fundamentally, as opposed to just making trading calls.”

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