On Chinese stocks:
“We are not as comfortable holding Chinese companies, given the track records of companies there. A lot of the fortunes of the companies, particularly the state-owned enterprises, are driven by government policies, and they are always changing the policies in reaction to the global environment and the performance of the shareholders. So, sometimes, minority shareholders will have to suffer.”
Wong recommended companies such as McDonald’s Corp. and Yum! Brands Inc., owner of the KFC and Taco Bell chains, which have operations in China.
On the outlook for China:
“We continue to like the macro Chinese story that is going to be around for a while. But we like to play that story in a more conservative manner. That’s why we have Hong Kong companies going into China, companies with a track record.”
While the companies “may be slow in building up footprint, at least you know they are running it for the benefit of the shareholders,” Wong said. “There’s more certainty on cash coming back to shareholders.”
“Taiwan has not been a market we like, I guess because of the business model, there tends to be a lot of manufacturing, outsourcing for the Dells of the world. If you lose a contract, you lose quite a substantial chunk of revenue. You always have the cost pressure. That is an issue for us.”
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