Two ways to profit from China’s re-opening

Article Excerpt

China is now re-opening its economy at the end of its stringent zero-COVID-19 lockdowns. That’s good news for these two fast-food operators, as China has been targeted as a major source of future growth. STARBUCKS CORP. $107 is a buy for aggressive investors. The company (Nasdaq symbol SBUX; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 1.15 billion; Market cap: $123.1 billion; Price-to-sales ratio: 3.8; Dividend yield: 2.0%; TSINetwork Rating: Above Average; www.starbucks.com) is a leading seller and roaster of specialty coffee. As of October 2, 2022, it had 35,711 outlets spread across 83 countries. Licensees operate about half of those stores. The stock is now up over 25% since China eased its COVID-19 restrictions in November 2022. The country is Starbucks’ second-largest market after the U.S., with 6,021 stores in over 190 cities. Management recently unveiled a new plan to fuel post-pandemic growth. That includes increasing the number of stores (net of closures) by 7% annually between fiscal 2023 and 2025. That’s up from its earlier…