China Equity Strategy 2H26 outlook: Less concentration, more upside

Research evidence excerpt

China Equity Strategy 2H26 outlook: Less concentration, more upside

9 June 2026

Equity Research Report

China Equity Strategy EquityChina Strategy

2H26 outlook: Less concentration, more upside

◆ Stay bullish on AI but diversify after the sell-off; keep our Steven Sun*, CFA (Reg. No. S1700517110003)

long-term positive view on AI after comparing China to US Head of Research, HSBC Qianhai Securities Limited HSBC Qianhai Securities Limited

stevensun@hsbcqh.com.cn

◆ Tech index preference: ChiNext Index > STAR50 > HSTECH, +86 755 8898 3158

as more positive on overseas AI compute chain Jeffrey Xie* (Reg. No. S1700523100002)

Analyst, China Equity Strategy Research

HSBC Qianhai Securities Limited

◆ Raise SZCOMP target to 17,000 (15% upside); lower consumer jeffrey.p.xie@hsbcqh.com.cn

discretionary to underweight and move energy up to neutral +86 10 5795 2361

Neal Chen*, PhD (Reg. No. S1700524120001)

More balanced approach to AI vs non-AI stocks in 2H. Despite the recent sell-off, HSBC Qianhai Securities Limited

neal.m.chen@hsbcqh.com.cn

performance remains AI-centric rather than broad-based, with info tech contributing +86 21 5066 2066

over 240% of CSI800’s y-t-d gains. While AI hardware may stay strong in 2H, we Lydia Li*, CFA (Reg. No. S1700525040002)

expect gains could broaden out to non-AI stocks, driven by fundamentals (industrials, Analyst, China Equity Strategy Research

materials), valuations (consumer-related), and dividend appeal (high-yield stocks). lydia.j.y.li@hsbcqh.com.cn

+86 21 5066 2022

China vs US based on a 5-layer AI framework: The US leads in chips by one-to-two

generations and applications (better monetisation), while China leads in energy (large * Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is