Bits & pieces 10 October 2025
UnderDogs - Following on from last week’s edition (Peak Performance – link) is another question:
what do key stock market indicies in China, Thailand, Malaysia, The Philippines and a plethora of
stocks under CLSA’s Asia-Pacific coverage have in common?
Again, you’d likely easily guess they are all currently not trading at/near their all time high.
Chief technical analyst Laurence Balanco notes from a seasonal perspective “there is a rotation out
of the year’s outperforming stocks into laggards – a strategy reminiscent of the Dogs of the Dow
approach”. A number of the technical underdog stocks in his also find themselves in a fundamental
underdog list which I’ve defined as stocks that have underperformed the MSCI Asia-Pac index
>20% over the past year, are rated positively by analysts and have >25% upside to target.
30 such stocks are highlighted this week. If markets keep rising they could/should be dragged up
and if markets fall they stand to not be the first sold-off.
“We see recent weakness in CSL as overdone, and the negative share price reaction to drug pricing/tariff
updates as not fully appreciating CSL’s presence in the US. We make no changes to our earnings outlook on
the basis further updates are necessary to gauge CSL’s exposure, which may ultimately be minimal.” Analyst
Andrew Paine on Australian underdog CSL which has slumped 30% over the past year but now trades on
long-term historical low multiples with >50% upside to Andrew’s target
“The Bank Central Asia story remains a good medium- to long-term investment thesis as the bank’s strong
transactional franchise and robust risk management continue to support its earnings and ROE trajectory …..
The bank’s solid fundamentals justify a valuation premium to peers, and its strong capital adequacy ratio
(CAR) of 28.4% has enabled its dividend payout to rise over the years.” Analyst Sarina Lesmina. Underdog
BCA is down 30% over the past year with Sarina seeing >50% upside to her target.
“Management is benchmarking leading multi-brand conglomerates like LVMH for operational excellence, and
we remain positive on the strong execution of Anta.” Analyst Chris Gao on Anta Sports, a Chinese underdog
which has underperformed the regional index by 28% over the past year. There’s 27% upside to target.
“LG Corp is the worst performing holdco under our coverage despite a few positive actions (treasury
share cancellation) ….. expectations have come down enough such that small positives could lead
to a rotational move into LG names” Analyst Steve Chung on Korean underdog LG Corp which has
underperformed the MSCI Asia-Pacific index by 27% over the past year. He sees >50% upside to his target.
“Ayala Corporation (AC) remains one of our top ideas in the Philippine market. The stock offers a lot of
value, given significant discounts to its real-time and 1-year forward NAVs. AC also announced that it is
expanding its buyback program to include purchase of shares of its publicly listed subsidiaries.” Analyst Alfred
Dy on a Philippines underdog. AC is down 36% over the past year with 66% upside to Alfred’s target.
Plus
Last Word – Monty Python’s skit which may (again) become banking reality
