CBN丨Foreign-funded institutions bullish on Chinese assets

Hi everyone. I’m Stephanie LI.

Coming up on today’s program

• Foreign-funded institutions are bullish on Chinese assets, following a rally driven by DeepSeek;
• China's improved Long March-8 carrier rocket makes maiden flight.

Here’s what you need to know about China in the past 24 hours

As China's scientific and technological innovation results have exceeded expectations, the "weight" of Chinese assets is beginning to increase in foreign-funded institutions, as reported by news portal 21jingji.com on Tuesday.

Before Spring Festival, DeepSeek, a home-grown startup in the artificial intelligence sector, launched two open-source AI models that shocked people in the scientific and technological circles both at home and abroad. This is due to the performance of these models which is not only on par with the world's leading large-scale models, but also the huge reduction in its training and reasoning costs.

DeepSeek has enabled investors to see the potential of Chinese technology stocks. Since February, several foreign-funded institutions including Goldman Sachs Group, Deutsche Bank AG and Bank of America, have become increasingly bullish on Chinese assets.

The rise of DeepSeek will create a medium- to long-term revaluation opportunity for Chinese technology stocks, said the news portal citing the Goldman Sachs Group.

By the end of 2025, the MSCI China index is expected to rise 14 percent under the neutral forecast, and the rise of the index is expected to surge to 28 percent under the optimistic forecast, the group said.

Goldman Sachs pointed out that DeepSeek's rise indicates that the development of the AI industry is shifting from the layer of hardware infrastructure to the layer of software application. This trend also provides new opportunities for the diversified development of the global market, especially for China-concept technology stocks, or Chinese technology stocks listed overseas.

"China's technological achievements have long been underestimated by investors," said Peter Milliken, Deutsche Bank's APAC Head of Company Research. "DeepSeek's launch proved the value of Chinese intellectual property. Moreover, China's advantage in high value-added fields and its leading position in the supply chain are rapidly expanding," said Milliken.

Not only have China-concept technology stocks been revaluated, but many foreign-funded institutions have also advised investors to increase their exposure to other Chinese assets.

Deutsche Bank said that Chinese assets will outperform other regions in 2025. Meanwhile, the Bank of America's strategist team recommends that investors should go long on Chinese stocks.

Public data showed that the market value of Chinese securities held by Norway's sovereign wealth fund, the world’s largest of its kind, increased by USD7.24 billion by the end of 2024 from a year earlier.

• China's Long March-8A carrier rocket made its maiden flight yesterday, sending a group of low Earth orbit satellites into space from the Wenchang Space Launch Site in the southern Hainan province. The satellite group is the second of its kind and will form an internet constellation. Also, China named the moon-landing spacesuit for its manned lunar exploration missions Wangyu, and its manned lunar rover Tansuo, which mean “gazing into the cosmos” and “exploring the unknown,” respectively, the China Manned Space Agency said today.
• China, France, Germany, India, Japan, Canada, and 55 other countries signed a declaration on "open, inclusive, and ethical" AI at the Paris AI Action Summit yesterday. The US and the UK refused to pen the framework.

Greater Bay Area, Greater future

• Chinese mainland investors are helping to drive a bull run inHong Kong shares, plowing almost HKD150 billion into the financial hub this year, more than seven times the amount they added during the same period in 2024. Turnover in the SAR via the exchange links accounted for nearly half the total on Monday with another HKD16.5 billion of purchases, the most since early December.

Next on industry and company news

• Chinese battery giant CATL yesterday applied to list on the Hong Kong Stock Exchange to raise funds for its Hungary plant, according to an exchange document. The Shenzhen-listed firm is expected to raise at least USD5 billion in the Hong Kong listing, media reported, which would be the largest in Hong Kong in four years.
• Retail sales of passenger vehiclesin China tumbled 32 percent last month from December, mainly due to a surge in sale promotions at the end of last year. Some 1.8 million passenger cars were sold in January, with the figure also down 12 percent from a year ago, according to data released by the China Passenger Car Association yesterday. Retail new energy vehicle sales reached 744,000 units last month, up 10.5 percent from a year earlier but down 43 percent from December.
• The global box office of Chinese animated film Ne Zha 2 reached 9.5 billion yuan as of 6 p.m. today, becoming the world's fifth highest-grossing animation and 23rd in global cinema history, according to Beacon Pro.
• Alibaba’s shares rose today after it is reported yesterday that Apple is partnering with the Chinese tech giant to roll out AI features for iPhone users in China.
• Jinjiang International today signed a joint venture framework agreement with Warner Bros. Discovery Global Experience to co-develop the Warner Bros. Harry Potter Studio Tour Shanghai. Based in the Shanghai Jinjiang Amusement Park, the attraction is expected to open in 2027.

Earnings reports express

• Semiconductor Manufacturing International, a Chinese semiconductor manufacturer, said its net profit dropped 23 percent last year from the previous one, with its profit also tumbling last quarter mainly due to lower investment returns. Net profit was 3.7 billion yuan in 2024, the Shanghai-based chipmaker said in a financial report released yesterday. Revenue jumped 28 percent to 57.8 billion yuan.

Switching gears to financial news

• Several Chinese banks have sold out their gold products after surging prices of the safe-haven asset fueled investors’ enthusiasm. The gold spot price at the London Stock Exchange rose over 1 percent to an all-time record of USD2,942.71 per ounce yesterday, marking the eighth time this year that the price of the precious metal hit a new record.

Wrapping up with a quick look at the stock market

• Chinese stocks rose on Wednesday with the benchmark Shanghai Composite up 0.85 percent, and the Shenzhen Component gained 1.4 percent. Hong Kong’s Hang Seng index also closed 2.6 percent higher, and the TECH index rallied 2.7 percent.

Executive Editor: Sonia YU

Editor: LI Yanxia

Host: Stephanie LI

Writer: Stephanie LI

Sound Editor: Stephanie LI

Graphic Designer: ZHENG Wenjing, LIAO Yuanni

Produced by 21st Century Business Herald Dept. of Overseas News.

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