HOLT APAC "Identifying CFROI improvers and recovery laggards in China’s ..."

Research evidence excerpt

HOLT APAC "Identifying CFROI improvers and recovery laggards in China’s ..."

Global Research

11 June 2026ab

HOLT APAC Equities

Asia PacificIdentifying CFROI improvers and recovery

laggards in China’s service industries Stella Wu

HOLT Sector Specialist

stella.wu@ubs.com

+852-3712 3546

China Services PMI rebounded to 54.4 in May (from 52.6) (Reuters), signaling early re- Hock Leng Ng

acceleration in service demand, which is beginning to translate into improving CFROI HOLT Sector Specialist

forecasts. This comes after a period of negative revisions and weak price performance, hockleng.ng@ubs.com

leaving most service industries trading at 25–30% discounts to their 10-year median +65-6212 3009

HOLT P/B levels. The setup highlights a potential inflection where fundamentals are

stabilizing while valuations remain suppressed. That said, the recovery is likely to be

uneven across the sector, with improving CFROI forecasts in some areas and continued

pressure in others. Against this backdrop, HOLT screens for CFROI improvers versus

recovery laggards to identify opportunities for both upside capture and downside

positioning within the sector.

China's service industries are trading at discounts to their historical median

The service industries exhibited weak momentum over the past three months, with

share prices declining by 5–10% alongside negative CFROI revisions. As a result,

valuations have compressed to attractive levels relative to history. On a HOLT P/B basis,

Commercial & Professional Services, Consumer Services and Consumer Discretionary

Distribution trade at c.25–30% discounts to their 10-year medians, while Media &

Entertainment trades at a more modest 10% discount.

Figure 1: HOLT Price to Book (P/B) across industries

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Price to Book (P /B) across industri es