If you’re wanting to build a strong portfolio, then having a few blue chips in there could be a good starting point.

Blue chips are typically large companies that have been operating for many years, have stable cash flows, and experienced management teams. This can make them lower risk options and a good foundation to build a portfolio from.

But which blue chip ASX 200 shares could be in the buy zone? Here are three to consider:

CSL Limited (ASX: CSL)

The first blue chip ASX 200 share to consider is CSL. It is one of the world’s leading biotechnology companies, comprising the CSL Behring business and the Seqirus business. It appears well-placed for growth over the long term thanks to strong demand for its immunoglobulins and its lucrative research and development pipeline. Macquarie is a fan of the company and has an outperform rating and $338.00 price target

Goodman Group (ASX: GMG)

Another blue chip ASX 200 share to look at is Goodman Group. It is a leading integrated commercial and industrial property company that has been growing at a solid rate over the last decade. This has been driven by the overwhelming success of its strategy of developing high quality industrial properties in strategic locations, close to large urban populations and in and around major gateway cities globally. The team at Citi appear confident this strategy will underpin further strong growth in the years to come. Its analysts have a buy rating and $27.50 price target on its shares.

ResMed Inc. (ASX: RMD)

A final blue chip ASX 200 share to look at is ResMed. It is a sleep treatment-focused medical device company with a portfolio of industry-leading products improving the lives of sufferers of conditions such as sleep apnoea. The good news is that this is a huge market with just an estimated one fifth of sufferers currently diagnosed. This gives ResMed a long runway for growth in the future. Credit Suisse is positive on ResMed. It has an outperform rating and $43.00 price target on the company’s shares.

The post 3 strong blue chip ASX 200 shares to buy appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended CSL Ltd. The Motley Fool Australia has recommended ResMed Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Evergrande and the wider Chinese property developer sector continues to go through financial difficulties. Is Evergrande and the wider sector about to go under?

What’s happening to Evergrande?

This week alone, the Evergrande share price has dropped 19% on the Hong Kong Stock Exchange.

At the end of last week, Evergrande told the market that it had received a demand to “perform its obligations” under a guarantee for an amount of around US$260 million. If Evergrande is unable to meet its guarantee obligations or certain other financial obligations, it “may lead to creditors demanding acceleration of repayment”.

The giant Chinese real estate developer said:

In light of the current liquidity status of the Group, there is no guarantee that the Group will have sufficient funds to continue to perform its financial obligations. The Group is taking a comprehensive view in assessing its overall financial condition, considering the interests of all stakeholders, upholding the principles of fairness and legality, and plans to actively engage with offshore creditors to formulate a viable restructuring plan.

Other developers in peril?

Evergrande isn’t the only Chinese real estate developer that is currently facing financial difficulties.

In October, the Fantasia business missed a US$206 million payment.

Other Chinese real estate businesses are also seemingly in financial strife.

The business Sinic is another that has missed making a payment.

According to reporting by News.com.au on Friday, Kaisa Group Holdings Ltd warned it might not pay off its $571 million bond due next week. The online news site also reported that the developer Sunshine 100 China Holdings has missed a payment of $179 million of debt and interest payments which was due on Sunday.

What is China doing about Evergrande?

Reuters reported that Guangdong province has summoned the chair of Evergrande, Hui Ka Yan. Guangdong province is where Evergrande is based.

The Guangdong government said that it would send people to the company to “oversee risk management, strengthen internal controls and maintain normal operations”.

It was also reported that China’s central bank, banking and insurance regulator and its securities regulator sought to reassure the market with statements.

People’s Bank of China said that short-term risks caused by a single real estate firm will not undermine market fundraising in the medium and long-term. Reuters reported the China Banking and Insurance Regulatory Commission (CBIRC) said the Evergrande issue would not affect the industry’s normal operations.

News.com.au quoted Bloomberg’s Will Mathis and Tiago Ramos Alfaro:

Distress among Chinese real estate firms is spreading, amid a debt crisis at giant China Evergrande Group that’s intensifying. The broader sector strains have pushed yields on Chinese junk dollar bonds – many of which come from the industry – near record highs. That’s made it difficult for distressed developers to refinance their maturing debt in the offshore market, which has contributed to a wave of defaults.

How have ASX shares responded?

While ASX miners like BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO) and Mineral Resources Limited (ASX: MIN) did each dip on Monday, they all have gone up today and recovered most of that lost ground.

Time will tell whether the situation worsens for Evergrande (and others) or not, and any longer-term effect that may have on ASX shares.

The post More missed payments: Is Evergrande and the China property developer sector going under? appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Christmas may be coming early for ASX 200 retail shares with the latest consumer survey pointing to a spending spree heading into the holiday season.

The Commonwealth Bank of Australia (ASX: CBA) today released its Household Spending Intentions (HSI) Index for November 2021, which hit its highest level since December 2019.

While the index will put a smile on the faces of ASX retailers, some are set to benefit more than others.

$240bn boost for ASX 200 retail shares

Interestingly, ASX investors may not have caught on to this just yet as just about all ASX shares in the sector rallied today. This caused the Consumer Discretionary sector to rise 1.6% when the S&P/ASX 200 Index’s (Index:^AXJO) gained just under 1%.

Expectations of a spend-a-thorn is backed by the $240 billion in savings that households have stashed away during COVID-19 lockdowns.

But as mentioned, not all retailers are likely to benefit to the same degree. The CBA’s HSI, which provides a gauge of Australian consumer spending, jumped 2.1% to 110.3 in November.

ASX 200 retail shares best placed to benefit

Within the index, spending on Transport recorded the biggest rise of 21.5%. This is followed by Travel at 14.7%, Retail at 9.6% and Household Services at 9.4%.

The strong rise in the transport category bodes well for the Ampol Ltd (ASX: ALD) share price and Bapcor Ltd (ASX: BAP) share price.

Holiday-deprived Aussies are also looking to spend big on their next getaway. Travel spending surged 77% since the Delta lockdown low in August this year, according to CBA. The biggest increases were for accommodations, travel agents, airlines and tourist attractions.

That’s good news for the Webjet Limited (ASX: WEB) share price, Flight Centre Travel Group Ltd (ASX: FLT) share price and Qantas Airways Limited (ASX: QAN) share price.

Other ASX retailers benefitting from spending spree tailwinds

Our best-known retailers will also be sharing in the Christmas cheer. Some of the strongest increases within this category are department stores, clothing, furniture & household equipment, electronic stores, and household appliances.

Some of the better placed shares in this segment are the Harvey Norman Holdings Limited (ASX: HVN) share price, the Accent Group Ltd (ASX: AX1) share price and Kogan.com Ltd (ASX: KGN) share price.

Positive outlook

The good times could continue to roll on too as the economic recovery extends into 2022.

“The CommBank HSI Index has shown a continued and broad based recovery in consumer spending since the end of lockdowns,” said CBA Chief Economist, Stephen Halmarick.

“While we have seen sharp increases in categories like transport and travel, there is still plenty of room for further growth.”

The post ASX 200 retail shares lift as Aussies head into Christmas with $240bn in savings appeared first on The Motley Fool Australia.

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Motley Fool contributor Brendon Lau owns shares of Commonwealth Bank of Australia and Webjet Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia owns shares of and has recommended Harvey Norman Holdings Ltd. and Kogan.com ltd. The Motley Fool Australia has recommended Accent Group, Bapcor, Flight Centre Travel Group Limited, and Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Shares in semiconductor specialist Revasum Inc (ASX: RVS) gained an impressive 33% on Tuesday, closing the session at 58.5 cents apiece.

Revasum shares started the day on the up as investors responded positively to a company announcement made at the 10^th annual December CEO summit. Here are the details.

What did Revasum present?

In a presentation at the summit, Revasum’s CEO Rebecca Shooter-Dodd gave an in-depth overview of the company’s technology, its operations, and its outlook.

The company touts itself as a “market leader for SiC [silicon carbide] single-wafer processing solutions”.

It achieves this via a product offering of a fully-automated single water tool set comprised of the 7AF-HMG SiC grinder and the 6EZ SiC polisher.

The polisher was commercialised in FY21 and, since then, the first tool has been shipped, installed and accepted, Revasum says.

The company stated it has achieved consistent revenue growth through FY21 with a 117% quarter on quarter increase seen in Q3 FY21. It anticipates total revenue of US$13.3 million-US$15.6 million for FY21.

It also boasts “confirmed customer purchase orders of US$9.0 million as of December 4” and anticipates shipping 40-50 tools over FY22 and FY23.

What’s the outlook for Revasum?

The company also believes it is well-positioned to deliver long-term sustainable growth. The assertion comes on the back of forecasts of a 60%-125% year on year revenue increase in FY22, around US$25 million-US$35 million.

Part of this growth is said to be fuelled by a forecast 183% compound annual growth rate (CAGR) in 8-inch wafer volume between 2020-2025, demonstrating the size of Revasum’s total addressable market.

According to the company, the move to 8-inch wafers is necessary to reduce the overall cost of SiC wafers. Revasum says its tool kit is easily configured for 6-inch and 8-inch SiC wafers with customers able to easily switch between the two.

The company also expects to be free cash flow positive in FY22. It anticipates gross margins to lift with an “FY21 year to date margin of 35.4%” — a step above the FY20 margin of 31.8%. 

Aside from this, the company expects its strategy will continue growing recurring revenue streams to build into its earnings profile.

The release also notes US President Joe Biden’s announcement in 2021 for plans to invest US$52 billion in semiconductor manufacturing and research, as part of the nation’s US$2 trillion infrastructure plan.

Revasum share price snapshot

Over the past 12 months, the Revasum share price has gained almost 47% after rallying almost 68% this year to date.

It has reversed course this past month and is down 16% in that time, however, still leads the S&P/ASX 200 Index (ASX: XJO) across longer timeframes.

The post Here’s why the Revasum (ASX:RVS) share price surged 33% today appeared first on The Motley Fool Australia.

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The author has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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