‘Result was incredible’: 3 ASX 200 shares Jun Bei Liu would buy now

three children wearing superhero costumes, complete with masks, pose with hands on hips wearing capes and sneakers on a running track.three children wearing superhero costumes, complete with masks, pose with hands on hips wearing capes and sneakers on a running track.

Now that reporting season is winding up, it’s time to review which ASX shares have the best prospects heading into the next one in August.

Tribeca portfolio manager Jun Bei Liu this week mentioned some of the stocks that she would be happy to buy after their latest results:

Back to the future for dairy producer

China was significantly behind other large economies in loosening its COVID-19 restrictions. Only in December did it back away from a strict zero-COVID policy.

That provided a golden opportunity for some ASX companies, such as A2 Milk Company Ltd (ASX: A2M). 

The dairy company’s latest report impressed Liu.

“The result was incredible. China delivered over 40% growth,” Liu told Switzer TV Investing.

“That reopening thematic in China is really gathering momentum for that business.”

One of A2 Milk’s biggest sales channels before the pandemic was through what is called the daigou. These are Chinese people based overseas who ship or carry western goods back into China for resale.

That international movement of people came to a halt as the coronavirus restrictions came in. But Liu feels like it’s about to explode again.

“[Chinese] students are yet to return to drive that daigou channel, but we know that’s coming.”

Liu is certain about the influx of students because last month, the Chinese Communist Party issued a directive that online learning from Australian universities would no longer be recognised.

A2 Milk has a “very strong balance sheet“, she added.

“It really provides a really good buying opportunity post that result showing the continuation of that earnings recovery.”

Biggest market gone, but could return this year 

Along similar lines, Liu is a fan of Treasury Wine Estates Ltd (ASX: TWE).

The company was devastated in 2020 when Australia-China diplomatic relations turned combative, and punitive tariffs effectively locked the wine producer out of its biggest market.

Now with a different government in Australia and a more conciliatory Chinese regime, Liu is optimistic about Treasury Wine’s fortunes.

“To me, this is a very good buying opportunity.”

Unfortunately, the Treasury share price dipped 6.9% in a single day earlier this month. But Liu feels like investors overreacted.

“They grew close to 20% and they guided 17% growth for the next 12 months,” she said.

“The market was disappointed because it wasn’t 20%… It was quite unfair to be punished with earnings expectations despite the slowdown around the world.”

Energy crisis could be exacerbated with China’s reopening

China’s economy ramping up this year will mean demand for energy may shoot up.

The energy sector has generally enjoyed a surge in valuations due to a global shortage of oil and gas over the past year.

But one exception seems to be Santos Ltd (ASX: STO), which is trading now 2.7% lower than it did a year ago.

Liu reckons it could be a value buy at the moment, as the company’s current valuation implies the oil price being 10% cheaper than it is now.

“It does give you quite a bit of upside,” she said.

“With the China reopening gathering momentum in the next few months, oil is pretty well positioned.”

The post ‘Result was incredible’: 3 ASX 200 shares Jun Bei Liu would buy now appeared first on The Motley Fool Australia.

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Motley Fool contributor Tony Yoo 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 recommended A2 Milk and Treasury Wine Estates. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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