Citi: US Midterm Results Seen as a Positive for China Export Stocks as Tariff Escalation Risk Falls

Stock News11-06

Citi has released a research report stating that the Democratic Party winning both the Senate and the House of Representatives in the US midterm elections has a positive impact on China's export sector, including a reduced risk of US tariff escalation and a potential decline in oil prices, which would help ease the US 10-year Treasury yield.

Among the China export stocks rated "Buy" by the bank, the preferred order is Techtronic Industries (00669), Shenzhou International (02313), Chervon Holdings (02285), Huali Industrial Group (300979.SZ), and Crystal International Group (02232).

As for stocks rated "Sell," they include Zhejiang Dingli Machinery (603338.SZ), Anhui Heli (600761.SZ), Johnson Electric Holdings (00179), and Topband (002139.SZ) (Sell/High Risk).

The bank noted that the main positive factors for the export sector this year include US tariff rebates, tariff relief, and the US economy performing better than expected, while the main negative factors are RMB appreciation and commodity cost inflation in copper, petroleum derivatives, and electronic components.

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