From South China Morning Post: 2024-06-19 22:12:06

Investors are cautiously optimistic on Chinese tech shares as analysts predict a 20-25% price upside thanks to an improving economy and less aggressive competition. Bellwethers like Tencent Holdings have led the rebound, signaling a shift in investor sentiment towards the sector amid macro stabilization in China.

Analyst Alex Yao’s change in tone on China’s tech sector reflects growing optimism after years of underperformance. Investor focus on improving macro indicators such as consumption growth and inflation will be key for future share price trends, despite concerns about a potential geopolitical impact and an emerging price war in the AI market.

While China’s economic growth remains uneven, signs of improvement in consumption and exports offer some encouragement for traders. Analyst Yao’s past scepticism about the sector’s investibility has evolved as he now emphasizes earnings sustainability as a key factor in rewarding corporates for long-term growth potential.



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