The asset management firm’s annual Analyst Survey, published yesterday, found that retail sales in China on goods and services such as cars and tourism have remained stable despite stockmarket volatility and these industries are likely to continue to grow in the future.
Analysts also expect wages in China to rise this year, driving consumer spending on leisure, entertainment and cosmetics – naming South Korean firms Amorepacific and Shilla as companies likely to benefit from this growth.
The findings also show that despite more than half of Fidelity’s analysts reporting deteriorating corporate conditions in China – 36% of analysts covering firms in China predict that this will actually have little or no impact on company strategy and in some cases may result in a positive outcome.
While 61% of analysts covering the global IT sector believe China’s slowdown will have a negative impact on company fundamentals, sector leaders with large cash reserves may benefit from the situation – as weaker overvalued internet companies are likely to go bust once the ‘hot’ money dries up.
Leon Tucker, head of research at Fidelity International, said: “Some companies have limited exposure to China and some can even turn this headwind as a business growth opportunity.
“Despite stock market volatility, Chinese retail sales remained stable, while auto purchases and first-tier city house prices rose.”