GuShiio.com Investment Bank and Institutional Research Report Summary: February 12 International Bank Research Report: Goldman Sachs and Deutsche Bank are optimistic about the Chinese market, and MSCI adjustments are attracting attention

China A-shares

• Goldman Sachs: Maintains overweight rating on MSCI China Index, expecting the index to rise by 14% in 2025, and even up to 28% under optimistic expectations. Goldman Sachs believes that Chinese technology stocks have significant advantages in the field of AI software, with soft technology accounting for 37% of the profits and 32% of the market value in the MSCI China Index. A-shares will also benefit from the development of AI soft technology, and stocks in the field of soft technology will be more ahead of the market.
• Deutsche Bank: It is expected that the bull market in China’s stock market has started in 2024 and is expected to break through the historical high in mid-2025. Deutsche Bank believes that due to the policy tilt towards consumption, the profitability of Chinese companies may exceed market expectations, Chinese companies have valuation discounts, and global investors have significantly low allocations to China, which will change completely.
• BlackRock Funds: From the perspective of the long-term risk premium model, the cost-effectiveness of long-term investment in large and medium-cap A-shares is higher than most of the time in the past decade or even the past twenty years. In the past year, the cost of capital has dropped significantly, and the growth of the stock market has not fully reflected the cash flow value brought by the downward shift of the center of capital cost. It is expected that between 2025 and 2026, the policy side is expected to further increase support, and the Chinese economy is expected to achieve initial results in new quality productivity, especially in high-tech manufacturing, and the economic growth rate will return to a virtuous cycle.

Chinese Hong Kong stocks

• Deutsche Bank: It is expected that Chinese stocks listed in Hong Kong are generally about 40% cheaper than A-shares, which further provides value investment opportunities. As Chinese companies continue to become more competitive in the global market, the valuation discount of the Chinese stock market will eventually turn into a premium. Investors need to re-evaluate the attractiveness of Chinese stocks and may need to significantly increase their allocation to the Chinese market in the medium term.
• Goldman Sachs: Maintains overweight rating on MSCI China Index, expecting the index to rise 14% in 2025, and even 28% under optimistic expectations. Goldman Sachs believes that Chinese technology stocks have significant advantages in the field of AI software, with soft technology accounting for 37% of the profits and 32% of the market value in the MSCI China Index.

US stocks

• Bank of America Strategist Team: It is predicted that after the continued upward trend of the US stock market stops in early 2025, its global market leadership will further weaken. Since the beginning of the year, the stock market returns of Brazil, Germany, the United Kingdom, China and other countries have exceeded the S&P 500 index, and investors are advised to go long on the Chinese stock market.