Hong Kong has been singled out as one of the biggest losers from a depreciating renminbi but while the currency's devaluation has hit the Hang Seng Index hard, there are still plenty of beneficiaries out there.
In a new report, Barclays identified 18 Hong Kong-listed companies with an overweight (OW) or equal weight (EW) rating that are expected to see positive earnings impact from a weaker Chinese currency.
"For most sectors, a weaker renminbi is generally negative for earnings," Barclays analysts said, a fact mirrored by the Hang Seng's 10 percent decline in the two weeks since Beijing devalued the yuan.
"Only the oil and gas, oilfield services and technology sectors would be expected to see positive earnings sensitivity."
The bulk of balance sheet assets in sectors like technology and oilfield services aren't denominated in reminbi, making them less exposed to the currency, Barclays explained. For example, 61 percent of tech assets were denominated in U.S. dollars or Hong Kong dollars at the end of 2014, compared to only 0.8 percent for the auto sector or 9 percent for consumer staples.
So if the renminbi were to weaken further to 6.5 per dollar, from 6.4 currently, technology companies would get a 1.63 percent boost in 2015 earnings-per-share impact while oil and gas firms would rise 2.4 percent, versus a more than 5 percent slump for the internet and infrastructure sectors.
"Basically, any Hong Kong company with a cost base in China will benefit from the lower renminbi," said Nicholas Teo, market analyst at CMC Markets.
"But any firm dependent on the Chinese consumer will be disadvantaged because of slowing domestic consumption from the yuan devaluation."
To be sure, Beijing's landmark decision to make its currency more freely floating is making life tough for most export-oriented Asian economies, not just Hong Kong. China tends to be the biggest recipient of exports from the majority of the region and a cheaper renminbi makes other Asian goods more expensive.
But while nations like South Korea, Taiwan, Singapore and Malaysia are all exposed, economists argue Hong Kong has additional vulnerabilities.
Chinese corporates often come to Hong Kong banks for loans but now a weaker yuan could see borrowing shrink as people prefer to borrow in a cheaper currency, Mirae Asset Global Investments warned in a recent report, noting that Hong Kong cross-border claims are already 20 percent lower from their recent peak.
Indeed, the overall outlook for Hong Kong stocks remains gloomy now that the benchmark index is in official bear market territory. The Hang Seng is more than 20 percent lower since its June 24 peak of 24,470.
But even as stocks regained their footing on Thursday, Teo warned investors not to cheer just yet. When markets go through periods of extreme volatility, a period of flat lining is normal, he said.
"There may be short-term respite but the longer-term outlook remains uncertain."