SALOMON: SOME CHINESE STOCKS IN HONG KONG ARE GOOD BUYS

SALOMON: SOME CHINESE STOCKS IN HONG KONG ARE GOOD BUYS

Negative sentiment toward China-based companies listed in Hong Kong is creating attractive investment opportunities, Salomon Brothers Hong Kong said Thursday in a research report.

The securities house highlighted companies that it said boast sound fundamentals, have been oversold, or are recovery plays with long-term investment horizons.The firm recommends a "buy" on Shanghai Petrochemical Co., Yizheng Chemical Fiber Co., Beiren Printing Machinery Holdings and Maanshan Iron & Steel Co.

The petrochemical sector offers strong earnings growth on undemanding multiples, Salomon said.

The capital-goods sector has probably reached the bottom of its operating cycle, although its recovery may be a long-term process given the lengthy production cycles involved, it added.

''Other factors, such as the liquidity of the stock and management quality, can also be useful when making investment decisions," Salamon said.

There are a total of 17 state-owned enterprises with H-shares listed on the Stock Exchange of Hong Kong.