ChinaAMC Looks Past Virus Fears to Tech, NEV, Chip Sectors

The company said it was among the first asset managers to return to normal operations; investor optimism on the rise.

Anna Vodopyanova
    Feb 18, 2020 3:30 PM  PT
ChinaAMC Looks Past Virus Fears to Tech, NEV, Chip Sectors
author: Anna Vodopyanova   

As Beijing takes steps to revamp its flagging economy amid the coronavirus epidemic, CapitalWatch takes a closer look at how businesses in the fintech sector are moving ahead. While many companies encourage their employees to work remotely to avoid the spread of infection, the art of online dealmaking has taken center stage. 

China Asset Management Co. Ltd. (ChinaAMC), one of China's largest fund managers, said it was among the earliest in the sector to return to work after the Chinese New Year. 

"We have made everything we can to ensure that the market volatility doesn't hit our company much, including to avoid massive redemption and keep new product launch going as planned," ChinaAMC's Global Capital Investments team, headed by Richard Pan, told CapitalWatch on Tuesday. "It turned out that the redemption is totally within control, and the new product sale has not been affected."

Specifically, it launched ChinaAMC New Energy Vehicle ETF after the holiday; the subscription that beat expectations, the company said.

Based in Beijing, ChinaAMC also has offices in Shanghai, Nanjing, Shenzhen, Chengdu, Hangzhou, and Hong Kong. The asset management company returned to near-normal operations on Feb. 3. However, "non-essential" employees continued to work from home, while "essential staff" worked in shortened shifts to minimize the time spent in the office. The company also provided its employees with masks and complimentary taxis.

ChinaAMC said despite the first-day plunge after the holiday, onshore market sentiment turned positive thanks to measures by Beijing including the injection of liquidity. It also attributed the strong sales of its new exchange-traded fund (ETF) to the "impressive returns of many mutual funds" in 2019.

"The virus epidemic actually turned out just a blip in the rising sentiment," ChinaAMC Global Capital Investments told CW. 

The company also said that it strengthened its digital marketing at a time when many people stayed home. During Chinese New Year, mobile internet traffic in the country amounted to 2.7 million TB, up 36% year-over-year, according to ChinaAMC. On WeChat, users spent 15% more time than a year ago, while online video viewership rose 40%, it said.

While the consumption sector was among those most affected by the coronavirus, ChinaAMC sees long-term growth opportunities in online retail and online education. It also said it remains convinced in the growth of the technology sector – meaning consumer electronics, semiconductors, 5G, and cloud computing – and the new energy vehicle (NEV) industry, "due to a growing awareness of climate change."

"We believe investment opportunities abound in midstream of the manufacturing of battery cells and lithium materials," ChinaAMC said.

The company also places its bets in China's semiconductor industry, thanks to the boost in domestic production caused by the tech war with the United States, and the photovoltaic industry.

ChinaAMC was among the businesses that donated funds to help battle the virus. The company said it has donated 2 million yuan in the initial response to the outbreak and an additional 700,000 yuan were contributed by company staff.

On Tuesday in Hong Kong, ChinaAMC CSI 300 Index ETF (HKEX: 3188) closed at HK$45.75.