WEBVTT - Soaring Stocks Backed by Consumer, Tech Strength 0:00:00.920 --> 0:00:04.480 Asian equities are on a tear, from South Korea's cosp 0:00:04.600 --> 0:00:08.760 index to Hong Kong's Hang saying the region stocks are rallying. 0:00:09.160 --> 0:00:13.040 That's just by domestic and global political risks. Part of 0:00:13.080 --> 0:00:16.599 this trade lays in the cell us trade that's gripped 0:00:16.640 --> 0:00:20.400 global markets, but there are also factors driving funds to 0:00:20.440 --> 0:00:24.960 the region, including China's increased focus on technology. 0:00:26.200 --> 0:00:29.600 You're listening to Asia Centric from Bloomberg Intelligence. I'm John 0:00:29.680 --> 0:00:30.640 Lee in Hong Kong. 0:00:30.680 --> 0:00:32.760 And I'm Katidmitrieva, also in Hong Kong. 0:00:33.280 --> 0:00:35.760 Today we're offering a catch up on big themes for 0:00:35.840 --> 0:00:39.840 equities this year and what lays ahead for twenty twenty five. 0:00:40.640 --> 0:00:44.680 Why are stocks rising despite growing risks, Where can investors 0:00:44.680 --> 0:00:47.760 still find value and what are the biggest opportunities. 0:00:48.479 --> 0:00:52.000 So we're joined today by Jessica t She's Emerging market 0:00:52.120 --> 0:00:56.400 and APAC equity investment specialist at JP Morgan Asset Management. 0:00:56.640 --> 0:00:58.080 Thank you so much for joining us today. 0:00:58.320 --> 0:00:59.360 Thank you very much for having me. 0:01:00.240 --> 0:01:02.240 I wanted to start kind of broadly because we're challenge 0:01:02.320 --> 0:01:07.160 just before the show about the resilience of the equity 0:01:07.200 --> 0:01:10.120 market even in the US where you had, you know, 0:01:10.160 --> 0:01:12.680 a bit of a hiccup earlier this year, the stocks 0:01:12.720 --> 0:01:15.959 came back, even in countries where there might be political 0:01:16.000 --> 0:01:19.120 issues or exposure to the trade war. Are you surprised 0:01:19.120 --> 0:01:22.240 by that? Are you surprised by how strong equity markets 0:01:22.240 --> 0:01:22.840 have performed? 0:01:23.800 --> 0:01:27.319 So I think it's definitely good news with especially the 0:01:27.400 --> 0:01:33.080 US exceptionalism narrative, no fading away, no imminent, no global recession. 0:01:33.319 --> 0:01:36.240 The Dotter actually may continue to weaken further, and so 0:01:36.240 --> 0:01:39.480 so far this has acted as a telling for Asian 0:01:39.560 --> 0:01:42.679 and energy markets. So we have seen actually a lot 0:01:42.680 --> 0:01:46.440 of interest moving from the US to elsewhere. People are 0:01:46.440 --> 0:01:51.000 looking for more diversification. And obviously, I mean Asia may 0:01:51.040 --> 0:01:54.640 face some varying degrees of no tariff risk impact, but 0:01:54.960 --> 0:01:58.400 at the moment the situation has de escalated. We are 0:01:58.440 --> 0:02:02.400 seeing more improvement on many fronts, and so as evidence 0:02:02.440 --> 0:02:05.600 of that, the Asian equity markets have done very well, 0:02:06.400 --> 0:02:10.400 not just in China, but also like in the Asian 0:02:10.480 --> 0:02:15.000 region in North Asia, like Taiwan, markets have done very well. 0:02:15.320 --> 0:02:18.240 So yeah, now we are seeing investors increasingly looking beyond 0:02:18.680 --> 0:02:22.840 the US and looking to regions such as Asia, countries 0:02:22.880 --> 0:02:25.920 like Japan and Chinese. So back in the discussion. 0:02:26.040 --> 0:02:28.480 And Jessica, there's been a lot of talk about this 0:02:28.800 --> 0:02:32.040 Cell America trade, and you've alluded to the fact that 0:02:32.080 --> 0:02:35.000 a lot of funds are flowing outside of the US 0:02:35.000 --> 0:02:38.160 into places like Asia. Do you think this trend will 0:02:38.200 --> 0:02:39.680 continue going forward? 0:02:40.240 --> 0:02:42.560 Well, as long as there's a lot of entertainties in 0:02:42.600 --> 0:02:46.120 the US, I mean, this trend may continue. But obviously 0:02:46.160 --> 0:02:49.560 the susue is very fluid. It depends also on you know, 0:02:49.600 --> 0:02:53.680 whether like the usler will rebound, whether the US economic 0:02:53.720 --> 0:02:56.600 growth will do better. So there are a couple of 0:02:56.840 --> 0:02:59.560 variables to take into account, but so far, what we're 0:02:59.560 --> 0:03:04.400 seeing is that investors believe that diversification is crucial in 0:03:04.440 --> 0:03:08.280 their allocations, and especially in times like this, it's very 0:03:08.280 --> 0:03:10.920 important to basically not put all the eggs in the 0:03:10.919 --> 0:03:13.920 same baskets. And so this is where we think that 0:03:14.000 --> 0:03:16.960 emerging market, especially the Asian region, should benefit from it. 0:03:17.600 --> 0:03:21.360 Do you think that's what investors are thinking about, you know, diversification, Like, 0:03:21.520 --> 0:03:25.120 why else would equity markets rally so much when there's 0:03:25.400 --> 0:03:27.679 you know, in times of uncertainty, you think of more 0:03:28.360 --> 0:03:32.840 safety assets as outperforming, but we've seen this incredible strength 0:03:32.840 --> 0:03:33.600 and equities. 0:03:34.120 --> 0:03:36.640 That's a very good question I think we are also 0:03:36.680 --> 0:03:39.839 in a different times compared to the previous trade war. 0:03:40.080 --> 0:03:43.920 Like back in twenty seventeen eighteen, I think this took 0:03:44.120 --> 0:03:47.080 a lot of investors' best surprise, but this time, I mean, 0:03:47.200 --> 0:03:51.119 we are familiar with this narrative obviously, like the magnitude 0:03:51.160 --> 0:03:55.360 of it is a bit different. But since that painful period, 0:03:55.680 --> 0:03:58.720 a number of markets have or worked on, you know, 0:03:58.760 --> 0:04:02.280 divers paying more that trade partners. In the case of China, 0:04:02.880 --> 0:04:06.119 the strategy of the government was to insulate more economy 0:04:06.360 --> 0:04:08.800 but continue to diversify their supply chains to mitigate the 0:04:08.840 --> 0:04:13.160 trade risk. We're also seeing a number of domestic stories, 0:04:13.520 --> 0:04:17.240 especially in the Asian region. There's plenty of domestically led 0:04:17.279 --> 0:04:21.400 growth stories, for example in the Philippines, which has benefited 0:04:21.480 --> 0:04:26.120 from the more favorable global interest rates but also more 0:04:26.160 --> 0:04:29.960 favorable community prices. We think that this offers a lot 0:04:29.960 --> 0:04:32.520 of opportunities for example for the Philippines banks, for the 0:04:32.520 --> 0:04:37.120 indonsial banks as well after the revaluation. So there are 0:04:37.160 --> 0:04:40.080 opportunities to be found outside of the US, especially in 0:04:40.120 --> 0:04:43.680 the Asian region, and that potentially could explain why I mean, 0:04:43.720 --> 0:04:46.599 we have seen such strong like rady in the past 0:04:46.680 --> 0:04:49.200 few months. The other point I want to mention so 0:04:49.400 --> 0:04:52.800 is on the government side, the policy side, we have 0:04:52.920 --> 0:04:57.120 seen much stronger credibility, like for central banks in terms 0:04:57.160 --> 0:05:01.480 of not managing their monetary and fiscal policies. China has 0:05:01.520 --> 0:05:04.560 become even more pro growth, pro business, So all of 0:05:04.600 --> 0:05:09.159 those elements helped contribute to I would say, a more 0:05:09.200 --> 0:05:11.800 constructive view on the Asian markets. 0:05:12.800 --> 0:05:16.120 Asia Centric is produced by Bloomberg Intelligence, where more than 0:05:16.120 --> 0:05:20.000 five hundred experienced analysts and strategists work around the clock 0:05:20.040 --> 0:05:23.560 to bring you timely, world class research. Our coverage spans 0:05:23.560 --> 0:05:27.880 two hundred market industries, currencies, commodities, and industries, as well 0:05:27.920 --> 0:05:30.920 as over two thousand equities and credits. To learn more 0:05:30.920 --> 0:05:35.159 about Bloomberg Intelligence, visit bi go on the Bloomberg terminal. 0:05:35.720 --> 0:05:38.240 If you like what you're hear, don't forget to subscribe 0:05:38.240 --> 0:05:42.240 And Shair Jessica, how has the tariff and the trade 0:05:42.240 --> 0:05:45.680 war impacted the investment decisions of your firm? 0:05:46.360 --> 0:05:50.000 Yeah, indeed, something that we have been looking at very closely, because, 0:05:50.240 --> 0:05:53.680 as you can imagine, with Asia being an export oriented region, 0:05:54.080 --> 0:05:56.680 the the region has been significantly impacted by the US 0:05:56.760 --> 0:06:01.799 tarif on exports. Obviously, now thoughts. Plus the daughter has weakened, 0:06:01.800 --> 0:06:04.360 so that has acted as a telling for the region. 0:06:04.440 --> 0:06:08.239 But still it's important to monitor this situation very closely. 0:06:08.680 --> 0:06:11.960 So what we have noticed is that not all countries 0:06:12.000 --> 0:06:16.320 should be considered. I mean the same way. Eljia has 0:06:16.360 --> 0:06:19.880 faced varying degrees of tariff impact, so Taiwan Korea, which 0:06:19.920 --> 0:06:23.479 are more export sensative, have felt more impact. But on 0:06:23.520 --> 0:06:28.160 the other hand, China, Indonesia, the Philippines are probably expected 0:06:28.200 --> 0:06:31.760 to be more resilient because of this focus on domestic growth. 0:06:32.320 --> 0:06:33.840 And as a matter of fact, if you look at, 0:06:33.880 --> 0:06:37.080 for example, those messi in disease, you will see that 0:06:37.120 --> 0:06:40.640 the majority of the revenues in Asia are mostly domestically driven. 0:06:41.080 --> 0:06:43.720 That is especially the case for the Philippines for China, 0:06:44.240 --> 0:06:47.599 and on top of that, many countries have already started 0:06:47.600 --> 0:06:50.440 to reduce reliance on the US exports. China is definitely 0:06:50.480 --> 0:06:53.640 the best example, and so that domestic focus should prove 0:06:53.680 --> 0:06:55.520 defensive for those markets. 0:06:56.080 --> 0:07:00.360 Seems like you might have a more constructive view of Asia. 0:07:00.920 --> 0:07:03.960 Then meets the eye if you read you know, headlines, 0:07:04.000 --> 0:07:06.880 because you think about a South Korea, for example, which 0:07:06.920 --> 0:07:09.960 you just mentioned, heavily exposed to trade and the trade war. 0:07:10.080 --> 0:07:13.920 Potentially we'll see once there's an agreement in place. But 0:07:14.320 --> 0:07:17.200 the costp has soared how much did you say that? 0:07:17.240 --> 0:07:19.400 It's almost I think it's the best performing market year 0:07:19.400 --> 0:07:22.320 to date in local currency terms, it's up almost twenty 0:07:22.320 --> 0:07:25.920 one percent. Also, the Hank saying is on fire, that's 0:07:26.160 --> 0:07:28.800 Hong Kong is up almost twenty percent as well. 0:07:28.960 --> 0:07:32.000 So it's sort of like, if you're an investor, thinking 0:07:32.040 --> 0:07:34.680 that the trade war is going to hit these economy 0:07:34.760 --> 0:07:38.000 is really hard, you probably wouldn't be investing so much 0:07:38.040 --> 0:07:41.200 in the equity market, So, you know, is the idea 0:07:41.280 --> 0:07:44.800 that perhaps the trade war won't hit these economies as 0:07:44.840 --> 0:07:45.800 hard as people think. 0:07:46.280 --> 0:07:49.000 So I think there are here very like domestic stories 0:07:49.040 --> 0:07:51.920 that explained why we have seence such rally in the 0:07:51.960 --> 0:07:54.600 case of Korea, and this is probably something that has 0:07:54.640 --> 0:07:59.800 been undermined. The improvements are in copper. Government story is real, 0:08:00.480 --> 0:08:03.520 probably not as advanced as what we're seeing in Japan. 0:08:03.600 --> 0:08:05.440 I think a lot of people are quite aware of 0:08:05.560 --> 0:08:09.480 this improvement on that side, but in Korea we're still 0:08:09.480 --> 0:08:12.720 at the in fancy stage, but things are progressing really 0:08:12.800 --> 0:08:17.240 quite substantially. So we talk about this value up program 0:08:17.400 --> 0:08:20.000 where it's not just pacting a few sectors, but we 0:08:20.120 --> 0:08:23.200 start to see like a change of mindset. Obviously, it 0:08:23.200 --> 0:08:24.920 will take some time, and in the case of Japan 0:08:24.960 --> 0:08:27.640 it took a decade, so I think for Korea was 0:08:27.640 --> 0:08:30.320 still at the beginning. But at least this should help 0:08:30.520 --> 0:08:35.040 broaden you know, this corporate government changed mindset and help 0:08:35.240 --> 0:08:38.760 ultimately like lead to better shop price going forward. The 0:08:38.840 --> 0:08:43.079 other also good news is probably the political entertainties. You 0:08:43.160 --> 0:08:46.160 probably have heard about this political turmoil over the past 0:08:46.360 --> 0:08:49.640 few months and now with the election outcomes, this has 0:08:49.640 --> 0:08:53.840 also brought more clarity. So all those elements helped contribute 0:08:53.840 --> 0:08:57.360 to a more positive outcome for Korea. And in this 0:08:57.480 --> 0:08:59.400 type of market this is well. We think that there 0:08:59.400 --> 0:09:01.760 are plenty we have stock opportunities to be found. But 0:09:01.840 --> 0:09:04.840 once again it's important to be selective because not all 0:09:05.080 --> 0:09:08.120 names will be impacted the same way. We are vigilant 0:09:08.120 --> 0:09:12.760 and those could be suffering from tariff frictions or edgertanties. 0:09:13.000 --> 0:09:15.000 But on the other hand, we try to look at 0:09:15.000 --> 0:09:18.880 the name that are attractive and presenting long term growth stories. 0:09:19.400 --> 0:09:25.600 Jessica, you alluded to domestic oriented companies and economies. Is 0:09:25.600 --> 0:09:29.920 that what JP Morgan is investing in i e. Companies 0:09:29.920 --> 0:09:34.319 that benefit from a domestic consumption lead story as opposed 0:09:34.320 --> 0:09:36.160 to export oriented companies. 0:09:37.120 --> 0:09:40.679 So I think it depends on the different strategies that 0:09:40.720 --> 0:09:45.200 we're looking at. But overall, our PROFULO managers have found 0:09:45.240 --> 0:09:48.839 a lot of built up stock opportunities in a number 0:09:48.840 --> 0:09:52.320 of domestic oriented stories. That doesn't mean that there are 0:09:52.840 --> 0:09:57.000 no interesting exporters. I think if they look at the exporters, 0:09:57.040 --> 0:09:59.120 they try to look at the one that will be 0:09:59.240 --> 0:10:02.720 facing less trade war risks. So for example, those that 0:10:02.760 --> 0:10:06.480 have really like new diversified their supply chains, not just 0:10:06.520 --> 0:10:09.080 with the US, but you know, within the Asian region 0:10:09.400 --> 0:10:12.959 or with the little least, or basically globally. There are 0:10:13.000 --> 0:10:17.040 also other like interesting exporters who may be focusing mostly 0:10:17.800 --> 0:10:20.600 India and not just know like the US. So we 0:10:20.640 --> 0:10:22.880 are trying to look at, you know, those that probably 0:10:22.920 --> 0:10:26.679 will suffer less from those trade risk But on the 0:10:26.720 --> 0:10:29.840 other hand, it's quite obvious that there are plenty of 0:10:29.920 --> 0:10:33.280 domestic stories to be found. For example, when we look 0:10:33.280 --> 0:10:36.280 at the Chinese tech story, we see a lot of 0:10:36.520 --> 0:10:40.720 industry up grades, important constitution story. The focus on sex 0:10:40.720 --> 0:10:45.520 efficiency is becoming very, very obvious. So that means that 0:10:45.640 --> 0:10:48.320 we can find a lot of tech opportunities, especially some 0:10:48.480 --> 0:10:51.880 AI you know proxies, but not just in the hard tech. 0:10:51.960 --> 0:10:54.560 In the software space, there are also plenty of opportunities 0:10:54.559 --> 0:10:58.280 to be found, especially post and deepsick impact. We think 0:10:58.320 --> 0:11:02.160 that there are plenty of good place in this place. 0:11:02.679 --> 0:11:06.600 So we're trying to say that'd be also quite diversified 0:11:06.679 --> 0:11:10.680 in our approach, making sure to pick the best conviction ideas. 0:11:11.000 --> 0:11:14.880 But yeah, that miss states. I think investment managers to 0:11:15.080 --> 0:11:19.400 like be very you know, focused on different diverse areas 0:11:19.400 --> 0:11:22.720 and not just purely like a few buggets. So to 0:11:22.760 --> 0:11:25.560 answer your question, there are plenty of domestic currented stories, 0:11:25.600 --> 0:11:28.160 but I won't say that we're purely invested in this 0:11:28.280 --> 0:11:31.480 area and ignoring the exporters. We're really also trying to 0:11:31.559 --> 0:11:34.960 look at the other global opportunities where the names could 0:11:35.000 --> 0:11:38.240 be less impacted by do straight frictions. 0:11:38.960 --> 0:11:43.480 Yeah, you mentioned Chrya Tech just now. Is there still 0:11:43.640 --> 0:11:46.520 room to find value after deep Sea? It seems like 0:11:46.520 --> 0:11:49.240 there is a big kind of rally that month or 0:11:49.280 --> 0:11:51.640 that week, But where do you see the most value 0:11:51.840 --> 0:11:53.080 in China tech right now? 0:11:54.120 --> 0:11:58.280 That's interesting because deepsea has collision the world that China 0:11:58.360 --> 0:12:01.480 is able to innovate and cheaper price. So when you 0:12:01.559 --> 0:12:04.760 have a very like high performing and you know, at 0:12:04.800 --> 0:12:07.880 a cheaper cost LM model, I mean, this is clearly 0:12:07.920 --> 0:12:10.920 a game changer for a number of sectors. So we 0:12:11.000 --> 0:12:13.480 have spotted a number of opportunities indeed in China in 0:12:13.520 --> 0:12:17.920 this space. First is the AI infrastructure, like all the 0:12:17.960 --> 0:12:22.480 AI servers you know, are becoming a necessity for the market. 0:12:22.640 --> 0:12:24.760 I mean not just for China, but actually globally. This 0:12:24.840 --> 0:12:27.720 is something that the common trend that we're seeing, so 0:12:27.760 --> 0:12:31.839 the AI edge is key. Second, so the AI use 0:12:31.920 --> 0:12:34.960 cases supposed dip sick, we think that the number of 0:12:35.480 --> 0:12:39.679 companies would probably look for more monetization and cost opportimization. 0:12:40.040 --> 0:12:43.000 So we think that there are plenty of opportunities to 0:12:43.000 --> 0:12:46.920 be found in the AI use cases like area. And finally, 0:12:46.960 --> 0:12:50.520 when it comes to automation, I think focusing on profitability 0:12:50.679 --> 0:12:55.400 is key, especially in the aging demographics environment, so it's 0:12:55.440 --> 0:12:58.600 important to look at all those game changing technologies. And 0:12:58.640 --> 0:13:02.080 we think that like humanity, the bots could become the 0:13:02.120 --> 0:13:04.959 next trend. So these are areas that we have been 0:13:05.120 --> 0:13:06.240 exploding in our. 0:13:06.120 --> 0:13:09.360 Shutche Jessica You mentioned quite a few themes there, but 0:13:09.400 --> 0:13:13.000 I wanted to talk about in particular AI and deep Seek. 0:13:13.240 --> 0:13:15.839 And one of the frustrations with a lot of investors 0:13:16.000 --> 0:13:19.640 is been the lack of monetization, especially with a lot 0:13:19.720 --> 0:13:23.840 of technology coming from China. Now we know China's greater innovation. 0:13:24.320 --> 0:13:26.800 You see what they're doing in electric vehicles, also with 0:13:27.200 --> 0:13:31.640 AI LM models, but they're really behind in making money 0:13:31.840 --> 0:13:34.600 out of these, like Deep Seek doesn't make that much 0:13:34.640 --> 0:13:38.200 money compared to someone like open Ai. Is that a 0:13:38.320 --> 0:13:41.880 risk that there's just so much competition in these sectors 0:13:42.200 --> 0:13:44.960 that leads to price wars. Some services you don't even 0:13:44.960 --> 0:13:45.480 have to pay for. 0:13:46.960 --> 0:13:49.360 We're SAI at the beginning, so you know, things can 0:13:49.400 --> 0:13:52.520 evolve very fast, and especially in the case of China, 0:13:52.840 --> 0:13:55.200 the market took claus surprise a lot of investors about 0:13:55.200 --> 0:13:59.120 the digital story, and so I think it's probably too 0:13:59.120 --> 0:14:02.640 early to have a definite entry on this. That said, 0:14:02.920 --> 0:14:06.000 it's true that in China it is extremely competitive, and 0:14:06.120 --> 0:14:08.920 what deepsy has brought is clearly like a big revival 0:14:08.960 --> 0:14:12.559 of the animal spirit, and clearly the corporate sentiment has 0:14:12.600 --> 0:14:16.000 been strongly boosted. So there are areas that we probably 0:14:16.080 --> 0:14:18.560 do better compared to others, and this is where we 0:14:18.600 --> 0:14:21.840 want to be extremely cautious and selective. So you mentioned 0:14:21.880 --> 0:14:25.160 about ev I think that's definitely an interesting sector to 0:14:25.200 --> 0:14:28.200 discuss because this is an area where we like to 0:14:28.240 --> 0:14:33.240 spend time in China has been extremely advanced in this field, 0:14:33.280 --> 0:14:35.800 and not just EVY but in the solar space. I mean, 0:14:35.840 --> 0:14:40.200 the China has a very dominant position there. But we 0:14:40.280 --> 0:14:44.760 won't jump into any type of ev OEMs for example. 0:14:45.160 --> 0:14:48.400 Here we want to be selective because the competition is 0:14:48.440 --> 0:14:51.360 extremely intensive and so when we think about the long 0:14:51.440 --> 0:14:54.800 term trajectory of the ev supply chain, we think that 0:14:54.840 --> 0:14:56.480 there's clearly a long way to go. But we want 0:14:56.520 --> 0:14:59.280 to focus probably a bit more on the energy battery 0:14:59.480 --> 0:15:02.880 or story because that would become very strong growth drivers, 0:15:03.000 --> 0:15:06.080 especially for the supplection related businesses, rather than you know, 0:15:06.120 --> 0:15:10.440 the ev o ems where it's extremely competitive. So in 0:15:10.480 --> 0:15:13.640 other words, we are constructing our bets mostly on you know, 0:15:13.680 --> 0:15:17.880 the suppliers with better or more favorable demand supply structure. 0:15:18.120 --> 0:15:21.160 So for example, these IV batteries, the power semis are 0:15:21.720 --> 0:15:25.080 very interesting and we also looked for the companies that 0:15:25.120 --> 0:15:27.800 present very high barriers to entrigue whether it is in 0:15:27.880 --> 0:15:33.080 terms of cost or capital investment or technology. I think 0:15:33.120 --> 0:15:35.320 that the one you know, with a strong pressing power 0:15:35.360 --> 0:15:37.920 will do better versus the others. 0:15:39.000 --> 0:15:42.360 Humanoid robots, how do you get exposure to humanoid robots? 0:15:42.680 --> 0:15:44.840 Many of them are not listed all the very small 0:15:45.360 --> 0:15:46.120 these companies. 0:15:46.960 --> 0:15:49.440 So we're trying to look at more the names that 0:15:49.600 --> 0:15:52.800 will contribute to those end products. So for example, in 0:15:52.880 --> 0:15:55.720 the automation space, they're trying to look at, you know, 0:15:55.840 --> 0:16:00.240 names that are basically providing like the other resources so 0:16:00.280 --> 0:16:02.880 that they can achieve this end goal. 0:16:02.840 --> 0:16:06.080 So like the metal or the screws or the chips 0:16:06.120 --> 0:16:07.200 maybe exactly. 0:16:07.480 --> 0:16:09.400 So this is the same by the way, for EV's 0:16:09.480 --> 0:16:12.640 not just about know like the EV cars. As I said, 0:16:12.880 --> 0:16:16.680 we are focusing on those TV suppliers, the EV batteries, 0:16:17.080 --> 0:16:20.120 IV storage system, but also the power like semans that 0:16:20.200 --> 0:16:23.320 will be fed into the end product. 0:16:23.720 --> 0:16:27.480 But do you see humanoid robotics or robot companies as 0:16:27.720 --> 0:16:30.280 like is this going to be a multi theme? 0:16:31.320 --> 0:16:35.240 Well, same words at the very beginning, So anything is possible. 0:16:35.360 --> 0:16:39.440 But according to our investment team, they do split a 0:16:39.440 --> 0:16:43.240 lot of interesting elements into it, and we are starting 0:16:43.240 --> 0:16:45.800 to see not just in China, but globally a lot 0:16:45.840 --> 0:16:50.160 of entresation about many the robots. So yes, we think 0:16:50.160 --> 0:16:52.400 this is going to be a long term trend. Let's 0:16:52.400 --> 0:16:53.760 see how things will play out. 0:16:54.800 --> 0:16:57.320 One more question on humanoid robots. Maybe we should do 0:16:57.600 --> 0:17:00.800 an entire episode at some very specific human oild robots. 0:17:00.800 --> 0:17:04.320 But as someone who looks at these companies and sort 0:17:04.359 --> 0:17:06.920 of use cases, I mean, what's your vision or how 0:17:07.080 --> 0:17:11.119 how does the team see humanoid robots playing out? Is 0:17:11.119 --> 0:17:13.880 it more on on sort of assembly lines, is it 0:17:14.320 --> 0:17:18.480 military applications and sort of what's the what's the time horizon? 0:17:19.040 --> 0:17:21.919 Well, our team usually keep a very long term, you know, 0:17:22.080 --> 0:17:26.480 investment horizon mindset, and they believe that nowadays in the 0:17:26.520 --> 0:17:31.240 number of economies, we're seeing aging demographics and there's also 0:17:31.280 --> 0:17:35.240 a very strong need to boost to profitability. Obviously, it 0:17:35.280 --> 0:17:38.960 will be very difficult to replace some labor forces. In 0:17:39.000 --> 0:17:41.320 the case of Japan, I think it's quite obvious. So 0:17:42.119 --> 0:17:45.200 our research team believes that actually do human aid robots 0:17:45.280 --> 0:17:48.679 could play a very important role in filling those gaps. 0:17:49.200 --> 0:17:52.480 So it will not just help the current labor force, 0:17:52.520 --> 0:17:55.280 but it will also help improve the productivity of people 0:17:55.320 --> 0:17:58.720 so that I can spend more efficiently time on other tasks. 0:17:59.160 --> 0:18:01.600 So it's not necessarily like I would say, at this 0:18:01.800 --> 0:18:04.960 point in time, like military, like related. I mean to us, 0:18:05.119 --> 0:18:09.000 this remains quite a sensitive area to invest, but we 0:18:09.080 --> 0:18:11.440 think that it's more like on the productivity level, those 0:18:11.560 --> 0:18:14.879 newer elements could bring a lot of positive change and 0:18:14.920 --> 0:18:17.159 that's why they believe that this is definitely part of 0:18:17.160 --> 0:18:20.200 the long term growth stories that we want to explain. 0:18:20.240 --> 0:18:22.639 One on that front is still the very beginning, but 0:18:22.680 --> 0:18:25.320 we think that this could bring definitely a good opportunities 0:18:25.320 --> 0:18:26.200 in a living one. 0:18:26.600 --> 0:18:28.879 Jessica, I wanted to also talk about another big trend, 0:18:28.920 --> 0:18:33.280 and that's the growing influence of females or the Shei 0:18:33.520 --> 0:18:36.240 economy in China. And what I mean by she I 0:18:36.280 --> 0:18:40.760 mean yeah, as I said, females not president, she women president. 0:18:42.600 --> 0:18:45.120 But for the benefit of the listeners, some of these 0:18:45.160 --> 0:18:49.879 stocks that are related to females driving consumption have really skyrocketed. 0:18:49.920 --> 0:18:53.639 Now PopMart, it's listed in Hong Kong. They make the 0:18:53.680 --> 0:18:57.600 famous Labu Boo dolls. That's up over two hundred percent. 0:18:57.680 --> 0:18:59.679 Did you want to explain what Labuoboo dolls are. 0:19:00.800 --> 0:19:03.000 For our dear listeners who are not aware of the 0:19:03.119 --> 0:19:06.080 popularity of blue Boo Boo dolls. There are these kind 0:19:06.080 --> 0:19:09.520 of gremlin like little dolls that you put on your keychain. 0:19:09.760 --> 0:19:11.159 They go on a keychain, you can put them on 0:19:11.200 --> 0:19:14.800 bags and stuff, and I believe that they were popularized 0:19:14.840 --> 0:19:17.159 by a lot of K pop celebrities. I think it 0:19:17.200 --> 0:19:21.040 was Black Pink actually that yeah, yeah, who drove the 0:19:21.080 --> 0:19:23.119 cruse And there was one that sold recently at auction 0:19:23.240 --> 0:19:25.679 for about one hundred and fifty thousand US dollars, like 0:19:25.880 --> 0:19:26.920 a bigger version of it. 0:19:27.160 --> 0:19:30.360 But that's stock now, it's it's multi billion dollar into 0:19:30.440 --> 0:19:32.679 the market cap. It's up two hundred percent. There's another 0:19:32.800 --> 0:19:37.000 cosmetics company it's up over one hundred percent. Is this 0:19:37.040 --> 0:19:39.879 a big theme that you see unfolding and going forward? 0:19:39.960 --> 0:19:44.720 Jessica, Indeed, we have seen actually this thing becoming a 0:19:44.760 --> 0:19:46.920 big trend. It was it took a lot of investors 0:19:46.920 --> 0:19:50.720 by surprise because it almost came from nowhere, know, like, 0:19:51.040 --> 0:19:54.680 it was very surprising. And I think that this is 0:19:54.680 --> 0:19:58.199 also part probably of the change in nor mindset in 0:19:58.280 --> 0:20:01.720 the market. I know, after tough period during COVID, you 0:20:01.800 --> 0:20:06.200 all the challenges related to that, those regulation, the properly downturn. 0:20:06.280 --> 0:20:09.959 People are maybe just want to enjoy like simple things, 0:20:10.040 --> 0:20:13.520 and probably I mean this has contributed to the search 0:20:13.680 --> 0:20:17.680 of such a consumption product. So yeah, we think it's 0:20:17.720 --> 0:20:20.520 aligned with you know, the some nutrends the conception that 0:20:20.560 --> 0:20:23.639 we're seeing in China. But one thing that to us 0:20:23.680 --> 0:20:26.200 would be very key to follow is to see whether 0:20:26.320 --> 0:20:30.680 this consumption recovery will take a stronger pace. For now, 0:20:30.720 --> 0:20:34.160 it has been quite muted simply because, yeah, it takes 0:20:34.200 --> 0:20:36.439 a lot of patients for people to see there are 0:20:36.440 --> 0:20:40.399 no confidence recovering, especially when you know, the problem market 0:20:40.440 --> 0:20:42.720 has been really tough and we have seen some negative 0:20:42.760 --> 0:20:46.080 wealth effects. I mean, this is not easy. But the 0:20:46.119 --> 0:20:49.840 positive aspect about China is that although like consumption, you know, 0:20:49.960 --> 0:20:54.080 like a confidence is still low at the moment, there 0:20:54.119 --> 0:20:57.320 are money in China. I mean, there's no lack of 0:20:57.359 --> 0:21:01.000 money in China. Basically what is missing is the willingness 0:21:01.040 --> 0:21:04.639 to spend this money because of those properly downturned, the 0:21:04.720 --> 0:21:08.920 negative wealth effects and those sort of job prospects, especially 0:21:09.080 --> 0:21:11.760 at least past few years. So if we see any 0:21:11.800 --> 0:21:16.320 gain in confidence in China, that could be highly significant 0:21:16.359 --> 0:21:19.080 and can help also like bring even more opportunities in 0:21:19.119 --> 0:21:20.240 consumption space. 0:21:20.840 --> 0:21:23.600 And do you see consumption in China? Maybe we could 0:21:23.640 --> 0:21:25.920 talk about the broader region here in Asia as well, 0:21:25.960 --> 0:21:29.800 but do you see that consumption lasting through the end 0:21:29.840 --> 0:21:33.200 of the year, at least for now, because that would 0:21:33.600 --> 0:21:36.280 you know, it's a little booboo. It's cosmetics companies, it's 0:21:36.520 --> 0:21:39.719 a range of service providers as well, like restaurant chains 0:21:39.720 --> 0:21:43.119 for example. So do you kind of see that continuing 0:21:43.160 --> 0:21:43.760 through your end? 0:21:44.400 --> 0:21:46.520 We think that would continue. But this is where we're 0:21:46.520 --> 0:21:49.640 extremely selective. We think that the areas that would benefit 0:21:49.760 --> 0:21:52.959 from those long term opportunities are the ones that probably 0:21:53.040 --> 0:21:54.960 at the moment, would be benefiting the most from the 0:21:55.000 --> 0:21:59.359 cella's similar expansion. So, for example, you know, all those 0:21:59.440 --> 0:22:04.000 areas which are for now presenting attractive evaluation, even the 0:22:04.000 --> 0:22:07.840 internet names in China that are more consumer facing, the 0:22:07.920 --> 0:22:12.040 names that are benefiting from the fiscal stimulus measures, those 0:22:12.080 --> 0:22:17.080 infrastructure no clapex beneficiaries, those areas should probably do better, 0:22:17.440 --> 0:22:20.080 especially if they have strong pressing power. But we want 0:22:20.119 --> 0:22:23.200 to be selective because not everyone in this game will win, 0:22:23.440 --> 0:22:26.679 especially in a very competitive environment, So we want to 0:22:26.680 --> 0:22:29.000 look at the names that not only present strong pressing power, 0:22:29.000 --> 0:22:33.120 but also very strong competitive advantage. In the consumption space. 0:22:33.520 --> 0:22:36.880 Which sectors fall on both sides of that, which sectors 0:22:36.880 --> 0:22:41.320 in China consumption space would be beneficiaries and which would 0:22:41.840 --> 0:22:43.840 be a bit more at risk, like I had mentioned, 0:22:43.920 --> 0:22:48.480