2 Top China Dividend Stocks to Buy in a Bear Market
August 30, 2022
Investors in China have had a wretched 2022. The benchmark Hang Seng Index in Hong Kong has fallen 14% so far in 2022 after having fallen by nearly 15% in 2021.
However, that was mainly down the large falls in China technology stocks as the likes of Alibaba Group Holding Ltd (SEHK: 9988) (NYSE: BABA) and Tencent Holdings Ltd (SEHK: 700) were battered.
That was on the back of a crackdown on China’s technology giants by the government. Elsewhere, a “Zero-Covid” policy that China’s government insists on sticking to also hasn’t helped the economy.
Yet, in times like these, there will always be companies that provide regular income to investors. These stocks can be bought in both good times and bad because they provide crucial services.
So, here are two China dividend stocks that investors can buy and hold in any bear market.
1. CLP Group
One of the Hang Seng Index’s utilities constituents is CLP Group (SEHK: 2). It traces its roots back to 1901, when it was known as “China Light & Power”.
It’s an electricity provider for Hong Kong homes but also has power assets in Australia, Mainland China and India. This stable business allows it to pay dividends four times per year.
In the first half of 2022, CLP saw revenue rise 17% year-on-year to HK$47.6 billion (US$6 billion). However, a fair value loss of around HK$8 billion on energy hedging contracts in Australia meant that the company saw a net loss o HK$4.85 billion during the period.
The company, which serves over 2.7 million customers in Hong Kong, actually saw operating earnings from its local operations increase 5.1% year-on-year to HK$4.2 billion.
Meanwhile, its Mainland China assets also saw solid performance on its higher zero-emission portfolio. CLP’s operating earnings from Mainland China soared 28.9% year-on-year in the first half 2022 to HK$1.24 billion (see below).
Tim, based in Singapore but from Hong Kong, caught the investing bug as a teenager and is a passionate advocate of responsible long-term investing as a great way to build wealth.
He has worked in various content roles at Schroders and the Motley Fool, with a focus on Asian stocks, but believes in buying great businesses – wherever they may be. He is also a certified SGX Academy Trainer.
In his spare time, Tim enjoys running after his two young sons, playing football and practicing yoga.