Asian stocks that are cheap and have the potential to be the "winners of tomorrow"

Fidelity Asian Values Trust portfolio manager Nitin Bajaj identifies three Asian investment opportunities

Patience, discipline, and diligence are the cornerstones of my investment philosophy. I gain from Fidelity's extensive, on-the-ground analyst network throughout Asia, which generates in-depth fundamental research. With the help of these insights, I am able to find reputable companies with honest and capable management teams and make investments at prices that provide a comfortable margin of safety. Unproven business models, highly leveraged companies, cyclical companies at peak profitability, and stocks trading at exorbitant earnings or cash flow multiples are all things I purposefully avoid.

My goal is to minimize capital loss and manage absolute risk during market downturns. This strategy should help compound returns at higher rates over time. As a result, the Trust upholds a value-oriented, contrarian bias, concentrating on undervalued small and mid-sized enterprises that have the capacity to emerge as the "winners of tomorrow" long before their advantages are widely acknowledged.

As bottom-up investors, we keep finding unique investment opportunities throughout Asia. Here are three instances.

Here are three Asian stocks that you should think about adding to your portfolio.

We have made an investment in the Taiwanese company Pacific Hospital Supply Company (Taipei: 4126), which produces medical supplies. Despite being a minor player, its new management is increasing market share more quickly than the C. The industry is worth US£80 billion and usually grows at a mid-single-digit rate. To promote sustainable growth, the company is concentrating on higher-margin, more complex products and targeting the US, Europe, and Japan's high-quality healthcare markets. The company's diverse clientele adds to its resilience. The stock has a 5% dividend yield and is trading at 16 times its anticipated 2026 earnings.

We work at Mega Lifesciences (Bangkok: MEGA), a generic drug manufacturer in Thailand. Nutraceuticals and wellness products account for the majority of its income, with prescription and over-the-counter medications making up the remaining portion. The company's product pipeline, internal manufacturing, and robust distribution network throughout ASEAN give it a competitive edge and higher margins than its competitors. Compared to multinational rivals, its management is more adaptable and nimble, which improves its efficacy in marketing and sales. The stock has a 5.5 percent dividend yield and is trading at 12 times its anticipated 2026 earnings.

Additionally, we are exposed to Tuhu Car (Hong Kong: 9690), a Chinese vehicle-parts retailer that connects car owners to its network of franchisee auto repair shops via its app. It's a challenging industry, but it's also scalable and low-capital, so businesses that figure out the secret will have strong long-term growth prospects and high capital returns. In China, where organized car parts retailing is still relatively new, Tuhu is the market leader. The company should be able to grow considerably over the next ten years thanks to the strong management team. Its stock is 15 times its projected earnings for 2026, and it is an early-stage business with a net-cash balance sheet.