Several analysts emphasize that the current investment strategy in China should center around artificial intelligence-related companies, particularly in the semiconductor and high-tech manufacturing sectors.
Leonid Mironov, a portfolio manager at Gavekal, noted that over half of the holdings in his newly approved China stock fund are tied to these areas, while consumer and healthcare stocks comprise only 6% of the portfolio. Recent data indicates that China's retail sales growth has hit its lowest point since the end of the Covid-19 pandemic, underscoring the unevenness of the economic recovery.
Liqian Ren from WisdomTree pointed out that while earnings from AI ecosystem companies are performing well, they are insufficient to bolster the broader Chinese economy. Aaron Costello from Cambridge Associates remarked on a shift in tech stock dynamics, indicating a narrowing focus on semiconductors and hard tech rather than a broad tech leadership.
The CSI 300 index, which tracks major stocks in Shanghai and Shenzhen, has risen over 4.5% this year, contrasting with the stagnant performance of Hong Kong's Hang Seng Index. Mironov's fund includes significant positions in Tencent and Alibaba, alongside hardware firms like Anji Microelectronics, reflecting a belief in the supportive policies benefiting smaller and mid-cap companies.
However, he remains cautious about investing in AI model companies Zhipu and MiniMax, seeking evidence of sustainable business models. In contrast, Morgan Stanley has a positive outlook on these AI firms and Shanghai-listed chip company Cambricon, setting a price target of 2,000 yuan ($294)