Equity Strategy - China: China Conference feedback: bubble, rotation, and the A-share style

研报英文原文证据摘录

Equity Strategy - China: China Conference feedback: bubble, rotation, and the A-share style

growth: onshore investors’ feedback,

Apr 20th

Rotation? The new rotation is within AI tech

With positioning and performance highly concentrated, investors are wondering about 2Q26: play defensive, awaiting for

rotation. Will a reopening of Hormuz drive a shift back to traditional consumers? Will the positive catalysts, Apr 2nd

Xi‑Trump summit trigger a “risk‑on” move into China internet? Unlikely. EM has become

R.E.A.L. moats amid AI shockwaves,more Taiwan/Korea‑heavy. Taiwan now has the highest weighting in MSCI EM (~25%),

Mar 16thwhile China’s weighting falls to ~22%, close to that of Korea. “Rotation” today is within

the AI chain - from memory to optical/CPO, or GPU to CPU - not the old playbook of tech

into property/consumption. There is some optimism that China’s property market is

bottoming, with improving transaction volumes and prices across regions, which should Glossary:

help stabilize consumer confidence. That said, investors are not rotating out of tech CPO: co-packaged optics

stocks. As one investor noted: “we meet the old‑economy names, just to make sure that CPU: central processing unit

there won’t be a sharp rebound or policy stimulus to squeeze our shorts.” EM: Emerging Market

GPU: graphics processing unit

The “A-share style”: thematics, stock picking, rotation ROI: return on investment

As overseas inflows into HK/China have yet to materialize and “locals are buying local,”

the China market is increasingly trading in an “A‑share style”: thematics drive the

direction, but near-term performance depends on stock picking. Mid/small caps are

favored, but positioning also matters, with constant rotations. Opportunity cost in this

bull market is high.