A man wearing a face mask rides a bicycle, as the country is hit by an outbreak of the novel coronavirus, in Beijing, China February 12, 2020.
Carlos Garcia | Reuters
Morgan Stanley analysts are so cautious on China they're downgrading a once hot sector — and turning to some individual stocks.
Multiple uncertainties, such as inflation, monetary policy tightening and greater regulation on Chinese technology companies, will weigh on the overall market, Asia equity strategists wrote in a mid-year China stocks outlook on May 17.
In this environment, one of the few certainties is that pricing power will be a key driver of outperformance this year, the analysts wrote. That makes stock picking a critical investment strategy, they said.
Here are five of their top picks among mainland Chinese and Hong Kong markets for stocks set for double-digit gains:
