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* China consumer not that compelling yet; look at travel-related businesses, turnaround stories and dairy stocks* SEA and India look pricey; in Taiwan, we like lenses, not bikes; in Korea, we look beyond short-term MERS issues* Our highest conviction stocks are Hotel Shilla, Shanghai Jahwa, China International Travel (CITS), Gree (all Buys), and Giant (Reduce)As visibility on China remains low and valuations, notably in South East Asia (SEA) and India, remain high, it's hard to find something for the summer.Greater China: tread carefully: Hong Kong continues to lose out to a "new TST" (Tokyo-Seoul-Taipei) with mainlanders. This implies low conviction on HK-dependent stocks (eg. Sa Sa [Reduce]) and higher conviction on those skewed to travel (such as CITS or Samsonite, both Buys). For China, we like white goods leaders (notably Gree) with consolidation and a cyclical recovery kicking in soon. Elsewhere, Stella should benefit from a pick-up in orders and Shanghai Jahwa from increased market share gains in cosmetics. In staples, we don't think there is a strong case for many stocks with the exception of the downstream dairy sector (notably Mengniu) for which mix improvement should help. In global brands, we like L'Occitane as a "margin reversion to mean" story. Finally, uncertainty lingers for Macau gaming and we lack conviction either way, although we like MGM China on its attractive valuation. SEA and India still looking pricey: SEA valuation is rich despite slowing growth (most downside based on our TP on CP All) with the exception of the Philippines (most upside on Puregold Price Club). For India, we like names skewed to urban recovery, notably Asian Paints and Titan.Taiwan: We are positive on lens manufacturers (notably Ginko), while we remain cautious on bikes (notably Giant). Korea: Looking beyond the short-term MERS impact, the surge in Chinese travellers to Korea should continue to support some names, notably Hotel Shilla (an HSBC GEMs Super 15 portfolio stock). In staples, we like CJCJ (an Asia Super Ten stock) on the restructuring of its food division and growth of its bio division.
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