Chinese New Year: Five Stocks That Will Hog The Limelight In 2019

BOC Aviation

Not only is this Asia's leading aircraft leasing company, but it is also in the top five globally by fleet size.

The aircraft leasing industry is a strong proxy to air travel growth, offering more consistent earnings than airlines, with fewer risks and double digit returns on equity.

BOC Aviation benefits from a strong order book, access to cheap financing and an experienced management team. Its dividend yield is more than 4.5% and the company has also announced its intention to increase the dividend payout ratio from 30% to 35%.

China Communications Services

This leading telecom infrastructure services provider is a key beneficiary of 5G investments.

Growth is mainly driven by operators' network buildout and increasing network maintenance expenditure as well as expansion into non-operator markets.

CCS has a strong net cash position and improving free cash flow generation, which should support a higher dividend payout ratio.

Xinyi Glass

One of China's largest glass producers, Xinyi is the global market leader in auto glass, which accounts for about 40% of its profits.

Construction glass sales (about 20% of profits) will benefit from the Chinese government's push for its energy saving LOW-E glass and its restrictions on new float glass supply.

New capital expenditure in Malaysia and Canada should drive revenue growth over the next few years.

China Mobile

The Year of the Dog could have been a tough one for China Mobile, as it faced reduced tariffs and cancelled roaming fees, yet it maintained earnings margins at 39%. Much of this resilience is due to its economies of scale and stringent cost controls. 4G new subscribers are on track, with fixed line and mobile both ahead of expectations for 2018. Trading on a 2019 price/earnings ratio of 12.3x with 5% earnings growth, the company looks a solid defensive play within China telecoms.

Lee & Man Paper Manufacturing

The company is the second largest containerboard manufacturer in China and ranks within the top five globally. Compared to its peers, Lee & Man is a low cost producer due to its product mix, vertical integration and economies of scale. It has also benefited from industry consolidation, tighter environmental regulations and import quotas. The company has diverse sources of supply for its key raw material, recovered paper, with 35% domestic, 33% from the US, 28% from Europe and 5% from Japan.

Lee & Man Paper Manufacturing

The company is the second largest containerboard manufacturer in China and ranks within the top five globally.

Compared to its peers, Lee & Man is a low cost producer due to its product mix, vertical integration and economies of scale. It has also benefited from industry consolidation, tighter environmental regulations and import quotas.

The company has diverse sources of supply for its key raw material, recovered paper, with 35% domestic, 33% from the US, 28% from Europe and 5% from Japan.