Bank of America reveals its top 10 Asia-Pacific stock picks for the first quarter

Published Thu, Jan 13 20226:59 PM EST

Bank of America named 10 stocks in Asia-Pacific that it says will have the "most significant" market and business-related catalysts in the first quarter of this year. The bank said these companies will best their peers and recommended their stocks as short-term buys. 1. Bajaj Auto The bank said Bajaj Auto , a manufacturer of two-wheel and three-wheel bikes, has the "right exposure" to the "right segments." That includes the premium market in India, as well as electric scooters. "The company's strategy to plug the white spaces in domestic market, premiumize the market and drive share gains in exports is progressing well," Bank of America wrote. 2. China Longyuan BofA said Longyuan , the largest wind power generator in China, could expand its construction capacity above expectations as China seeks to limit emissions. 3. Huatai Chinese investment bank Huatai is well-positioned for the "wealth migration" from property investments to stock and fund investments that's taking place in China, said Bank of America. 4. IGO Bank of America has a buy recommendation for Australian miner IGO primarily because it has started mining lithium, a key metal used in EV batteries. 5. Larsen & Toubro Indian conglomerate Larsen & Toubro , which owns several businesses in engineering, construction and manufacturing, is trading below long-term valuations and that presents an attractive opportunity, Bank of America said. BofA noted government spending is picking up with $356 billion worth of orders set to be awarded over the coming two years. Larsen & Toubro will be a key beneficiary of this cycle, it said. 6. Sea Bank of America said gaming and e-commerce company Sea , which has a heavy presence in Southeast Asia, is best-positioned to ride the boom in online shopping and improving GDP per capita in the region. In the medium term, there's room for its e-commerce arm Shopee to increase its market share to about 50% in Southeast Asia, Bank of America wrote. 7. Seven & I Seven & I is Japan's largest convenience store chain and "by far" the most attractively valued Japanese retail sector major under Bank of America's coverage, according to the investment bank. It's also set to expand aggressively in the U.S., with an expected 6% to 8% operating profit growth over the next several years, Bank of America wrote. 8. SK Hynix Bank of America has an optimistic outlook on South Korean chipmaker SK Hynix, citing healthy chip demand from servers and data centers. 9. Sony Bank of America likes Sony for its longer-term earnings growth potential, driven by music, games and semiconductors. In particular, the games segment will drive profits to annual growth of 16% in fiscal year 2023, the investment bank said. 10. TSMC The rise of artificial intelligence and "internet of things" is set to drive demand for computing power and TSMC , as a leading chipmaker, is in a good position to capitalize on that, says Bank of America. Over the next three to five years, it sees 10% growth for TSMC and rising dividends. Despite its strong fundamentals, TSMC shares underperformed the Taiex, Taiwan's wider benchmark index, in 2021 and its current valuation looks attractive, says Bank of America.

A Bank of America branch in San Francisco on Jan. 14, 2021.

David Paul Morris | Bloomberg | Getty Images

Bank of America named 10 stocks in Asia-Pacific that it says will have the "most significant" market and business-related catalysts in the first quarter of this year.