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BlackRock Says Satellite Images Can Help Track Chinese Companies

  • Big data seen giving investors an edge on monitoring activity
  • Images from space can show whether projects are completed

BlackRock Inc., the world’s largest money manager, suggests investors look at images from space, mobile phone usage and conference call transcripts to help understand how Chinese companies are performing.

Images from space can show whether a project is being completed on time by monitoring the amount of materials going into a construction site, Kate Moore, chief equity strategist at BlackRock Investment Institute, wrote in a report. Similarly, mobile-phone usage data can help track China’s tourism industry, while credit card and online sales data can help forecast sales of global companies, according to the report.

“Investors need not depend solely on China’s government data when making investment decisions,” Moore wrote. “Big data culled from satellite imagery, mobile phone usage and text mining of filings from companies doing business in China may give investors an edge.”

Global executives began speaking more positively about China last year after declines in 2014 and 2015, said BlackRock, whose Scientific Active Equity team tracks conference call transcripts. The money manager has also seen a growing emphasis on the Chinese government’s supply-side reform campaign. Tallying the number of articles on a topic in official newspapers such as the Communist Party’s People’s Daily newspaper can give investors a sense of the policy direction that authorities are taking, according to Moore.

“Making money in Chinese stocks requires dropping one’s preconceptions, paying close attention to policy priorities and using new data sources to generate ideas,” BlackRock said. “Big data can help supplement traditional fundamental analysis.”

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