Four stocks which can't rock Bolton's China love story

Fidelity China Special Situations manager Anthony Bolton has highlighted some of the stocks which keep him deeply in love with the China story.  

The veteran fund manager has suffered a difficult run since his vehicle's blockbuster launch in 2010, losing 26% in 2011 versus -11.4% by his MSCI China benchmark.

However, speaking exclusively to Citywire, Bolton (pictured) said he remains convinced the Tiger can deliver, despite the wider global slowdown.

He is banking on China's transformation into a largely self sufficient economy and says smaller and mid-sized companies, which make up 75% of his portfolio, are the key bet.

Bolton plucked these four stocks from his £563.73 portfolio which he believes will offer impressive returns for those prepared to back them in the long term.  

1. 3SBio

Diabetes is a big problem in China, Bolton explained, pointing out that in part this is due to the country's population becoming increasingly wealthy and altering its diet from rice-based to meat-based as a result.

3SBio is a US-listed company that profits from making drugs used to counteract the side-effects of kidney dialysis, a treatment offered to patients who are also experiencing kidney problems.

'The number of people being treated is increasing as there is more government finance and this [company] is a leader in the field,' Bolton explained.  'You're paying about 12x [earnings] for something that's growing well in the 20s, which I think is pretty attractive,' the manager added.

2. Kingdee

'IT services is an area I'm very excited about,' Bolton said as he pointed out companies in China need to become more IT efficient.

'Kingdee is in the business of accounting package software and looks very similar to a company in the UK called Sage,' Bolton said.