JPMorgan named five stocks it recommended to buy amid expected gains in the broader Chinese stock market during February. The investment bank said it “remains bullish” on Macao casino operators Sands China and Galaxy Entertainment, and Hong Kong retail landlords Wharf REIC, LINK and Fortune REIT. Strategists at Wall Street banks said last week’s sell-off in Hong Kong listed shares as profit-taking by some investors. He also said the broader market is becoming a “quality laggard in consumption as well as cyclical value and growth space.” The Hang Seng fell 3.2% over the last five trading days in January, although the index is up more than 10% for the month. .HSI 5D line “We see China equities … grinding more in February post the end of January sell-off,” said JPMorgan strategists led by Wendy Liu in a note to clients on February 1. “Some investors seem willing to continue until mid- Peak growth 2023 … while others note that the selected stocks have run strongly in the reopening theme and want to lock in gains and play to lag behind quality in consumption as well as cyclical value and growth space. Equity analyst and head of Asia games, DS Kim, in a note separately on February 1 said that Macau demand recovered “right out of the gate” since Beijing released the “zero-Covid” policy. Gross gaming revenue more than tripled compared to last year despite the lack of high-rollers and the Lunar New Year holiday, according to Kim. He also said that profits have recovered to 60-70% of pre-Covid levels. “We remain comfortable in the sector, as we see current valuations ~ 12x normal EV/EBITDA min attractive numbers vs. 13x midcycle or 15-16x up-cycle historically,” Kim said. The average price target of 599-FF 1Y Equity analysts polled by FactSet points to an 11% rise over the next 12 months for Sands China. The company’s stock has fallen more than 10% in the past two years since authorities in Beijing banned travel to Macao. Meanwhile, the consensus price target for Galaxy Entertainment is up just 1%. However, JPMorgan’s Kim said analysts’ expectations were due to rise higher on positive data points. “One thing seems very clear to us: Street estimates should increase significantly for 1Q23 (which we estimate to be about 35-40% mass recovery) and FY23 (about 60% mass recovery vs. 2019), in our view,” he added.