Analysts have been arguing that Chinese stocks look cheap for years but one analyst told CNBC that now is really prime time for bargain hunting in some sectors, as authorities look poised to embark on monetary easing.
Kerry Series, founder and chief investment officer at Sydney-based Eight Investment Partners, told CNBC that Chinese stocks looked very attractive, pointing to bank and property stocks in particular.
"China is trading at record-low valuations. The Hang Seng China Enterprises Index is on a price-to-earnings ratio of around about six times, while back in 2007 it traded at 27 times," said Series.
Series' comments come against a backdrop of slowing growth in the world's second-largest economy. China's first quarter gross domestic product (GDP) growth - due later this week - is expected to slow to its lowest level since 2009 this week at 7.3 percent on year, according to consensus views. Expectations that authorities could use stimulus measures to invigorate growth as they did in 2009 have been building as a result.
Easing could provide a boost for the banking and property sectors in particular, Series said, considering both have been under strain recently.
"A slowdown in China is not necessarily a bad thing, particularly for banks and property stocks. What we may well see is an easing of monetary policy and administrative measures which have been very tight in China and focused on the property sector... that could be the spark for the re-rating of these stocks," he added.
China's five biggest banks more than doubled the level of bad loans they wrote off last year compared with 2012, the Financial Times reported in March. Meanwhile, China's property market has faced tightening measures, slowing home prices and reports that a large mainland property developer is unable to repay its bank loans.
But analysts at Japanese investment bank Nomura hold no exposure to banks in their China portfolio and remain cautious on the sector.
In their latest China equity strategy report, Nomura highlighted three crucial issues for the banking sector: rising non-performing loans; the move towards deposit rate liberalization; and rising competition from online financing and private banks.
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Non-performing loans rose to 1 percent in the last three months of 2013, the highest level in two years. Meanwhile, deposit rate liberalization is expected to cause banks to rush to ramp up rates as they compete for deposits, narrowing margins and putting pressure on less-competitive lenders.
"We believe earnings changes would be more on the downside given Chinese banks are likely to continue to face headwinds," said Nomura.
However, Nomura was more positive on property stocks.
"We expect the growth of major listed developers to remain above 20 percent, leveraging on their strong execution, aggressive land acquisition in 2013 and good access to capital. We suggest investors accumulate big names with decent sales growth and attractive valuations," he said.
Series added that another benefit for investors is that Chinese banks and property companies pay dividends.
"You get paid a decent dividend yield to sit and wait for other investors to see the value, and for a long-term value that's a good strategy," he said.
He expects dividends to remain intact despite economic headwinds.
"The balance sheets of both the banks and the property companies are very sound. They've been prepared for a slowdown and compared to pre-crisis they are in much better shape. I actually think dividends are reasonably safe for the economic future," he added.