S-Chips Outlook Hazy; Seek Out Value - Citigroup

[Dow Jones] Singapore-listed China stocks, or S-chips, face cloudy outlook due to slowing growth momentum, earnings uncertainty, says Citigroup. Broker notes, 1Q08 results showed downward trend in profit margins, consensus on FY08/FY09 earnings forecasts also suggest slowing growth momentum. Says, recent data shows China consumer confidence dipped; high commodity prices, rising wage costs will add to pressure. Advises investors to seek out oversold opportunities; "in view of the reduced earnings visibility, we prefer to take a value-oriented approach in picking S-chips." Screens S-chips for low PE multiples, net cash position; says on that basis best picks are Li Heng (E9A.SG), China Sky (E90.SG), Fibrechem (F12.SG), Celestial (C56.SG), Sino Techfibre (AD8.SG), JES (EG0.SG), Pan Hong Property (P36.SG), Beauty China (B15.SG) and Longcheer (L28.SG). FTSE ST China index currently +2.3% at 410.74.