Speaker 1: Chinese equities are on a tear, and it's led by
Speaker 1: technology breakthroughs like Deep six AI model and BYD's super
Speaker 1: fast charging EV battery are reminders of China's innovation. Today
Speaker 1: we're sitting here and of March, the Hangsang China Enterprises
Speaker 1: Index that tracks mainland equity is listed in Hong Kong,
Speaker 1: is up almost twenty percent this year, ranking it among
Speaker 1: the best performing around the world.
Speaker 2: But we've had false stans before. Some investors are questioning
Speaker 2: whether things have really changed. China's property market remains weak.
Speaker 2: Officials are still struggling with deflation. The pivot to consumption
Speaker 2: to lead growth has yet to bear fruit, and now
Speaker 2: we have the onset of US tariffs. You're listening to
Speaker 2: Age Eccentric from Bloomberg Intelligence. I'm John Lee in Hong Kong.
Speaker 1: And I'm Katydmitriva, also in Hong Kong.
Speaker 2: Today's guest is Winnie Wu. He is the chief China
Speaker 2: equity strategist and co head of China Equity research for
Speaker 2: Bank of America Securities. We need welcome to the show.
Speaker 1: Thank you very much for having me so, Winnie, I
Speaker 1: guess the first question is given the topic, what actually
Speaker 1: is the leading Chinese stocks right now. Why have we
Speaker 1: seen this rally?
Speaker 3: I think the rally to some extent is a continuation
Speaker 3: of last year. Right September October we saw a big
Speaker 3: round of China rally and that was mainly driven by
Speaker 3: the policy pivoting policy stimulus, that people are getting more
Speaker 3: optimistic about China monitary, physical easing, that they're going to
Speaker 3: do more and prioritize growth over other things. But more importantly,
Speaker 3: this year's rally are driven by two additional factors. One
Speaker 3: is the technological breakthrough right Deep Seek clearly was a
Speaker 3: big while to the global investors. That changed a lot
Speaker 3: of the consensus understanding of the future of AI, the
Speaker 3: global competitive landscape of AI, and also the perception of
Speaker 3: whether China's private sector is still competitive and innovative right,
Speaker 3: whether the animal spirit it still exists in China. So
Speaker 3: I think, you know, this technology breakthrough is a very
Speaker 3: big factor. But the other thing is also the understanding
Speaker 3: geopolitics and the so called policy certainty, policy visibility. You know,
Speaker 3: for the past there's a lot of criticism on China
Speaker 3: lack of policy visibility, the lack of policy direction clarity.
Speaker 3: But I think this year actually people feel China's policy
Speaker 3: visibility is better that we know if say, you know,
Speaker 3: consumption deflation, if the export grows, weakens, right, if economy struggles,
Speaker 3: Chinese regulator are going to do more, and they've vowed
Speaker 3: several times, you know, from September October last year to
Speaker 3: January to the reason m PC they said they're going
Speaker 3: to launch more policy to support economies.
Speaker 4: So people actually are getting a bit.
Speaker 3: More confident about the policy put for China, whereas on
Speaker 3: the US side, whether there's tariffs, no tarriffs, ten percent,
Speaker 3: twenty percent, arriffs on what and who is actually quite confusing.
Speaker 3: And also other non tariff barriers, including some of the
Speaker 3: Chip band's export controls, are also leading to a lot
Speaker 3: of confusion.
Speaker 4: Sort of a flip.
Speaker 1: It's a flip from what we've seen in recent or
Speaker 1: past years with US and China than.
Speaker 3: Totally so to that extent, the policy discount on China
Speaker 3: has largely reduced and the equity risk of premium on
Speaker 3: China because of you know, China has no innovation, has
Speaker 3: no future, have no growth in the AI era, that's
Speaker 3: also completely reversed.
Speaker 2: So we have to ask, is this time really different
Speaker 2: for Chinese equities because we've had quite a few false
Speaker 2: starts before.
Speaker 1: Yeah, and we've had false even with the government with
Speaker 1: a certainty. I mean these policies, are they really that certain?
Speaker 3: I mean, I think market always have ups and downs, right,
Speaker 3: And we always say that from equity market perspective, market
Speaker 3: leads fundamental in terms of the GDP cycle, in terms
Speaker 3: of the earning cycle, but it typically leads by a
Speaker 3: couple quotas.
Speaker 4: It doesn't lead by twelve months.
Speaker 3: So from our perspective, the way to evaluate whether this
Speaker 3: rally is sustainable it's always are we seeing the fundamental
Speaker 3: turnaround in the foreseeable future? This time around, I think
Speaker 3: the technological breakthrough is very significant in the sense that
Speaker 3: hopefully it stopped the so called downward spiral that market
Speaker 3: worried about in the past few years. That you know,
Speaker 3: every segment in the economy from local government to big
Speaker 3: corporate to general household or in the sort of deleveraging
Speaker 3: the risking balance sheet recession type of mode. I think
Speaker 3: that deep Seak really helps signal reversal of the sentiment
Speaker 3: of the morale. After the breakthrough of deep Seak, we
Speaker 3: saw local government are getting more pro growth, right, you
Speaker 3: know there's a healthy competition between the higher tiers cities
Speaker 3: like shang Gan. People are asking, hey, why the deep
Speaker 3: Sea Unitary robotics are both based in Haunjo, Why it's
Speaker 3: not changing, why it's not Beijing, why it's not showing
Speaker 3: high So the local government are shifting their focus to
Speaker 3: more on how do we promote future growth? After deep Sea,
Speaker 3: we see the leading internet companies which in the past
Speaker 3: few years we're very much focused on efficiency, games, buy bags,
Speaker 3: increasing playout to now doing capex investing for the future,
Speaker 3: which is very encouraging and even at individual household level. Previously,
Speaker 3: the perception is all the smart young kids or rich
Speaker 3: entrepreneurs are or fleeing.
Speaker 4: Away from China.
Speaker 3: But the breakthrough of deep Sea and Unitary are very encouraging,
Speaker 3: inspiring in the sense that the founder teams are very
Speaker 3: much homegrown talents. Many of the funders never been to
Speaker 3: Western education. So suddenly the smartest kids in the Chinese
Speaker 3: university like Beta, like Picking university like Tin. They see
Speaker 3: a future, right they can do something really cool staying
Speaker 3: in China rather than you know, trying to flee the
Speaker 3: country or just working for the governmental soe s a right.
Speaker 3: So I think you know, this time is different in
Speaker 3: the sense that the technological breakthrough hopefully signals a buttoning
Speaker 3: of the downward spiral and starts a more upward spiral
Speaker 3: going forward. That there's more animal sperit, there's more entrepreneurship,
Speaker 3: there's more appetite for investment. But having said that, technological
Speaker 3: breakthrough is a little bit random in timing, right why
Speaker 3: is it January?
Speaker 4: Why are they not March?
Speaker 3: But the short term impact of this breakthrough broader economy
Speaker 3: on corporate earnings, on the problems we discussed earlier, deflation,
Speaker 3: job employment, in our property market, the short term impacts
Speaker 3: too insignificant.
Speaker 4: That's why when.
Speaker 3: Equity market rallies too hard, when equity market run too
Speaker 3: much ahead of the fundamental, we could still see pullbacks,
Speaker 3: or sometimes significant pullbacks. So I'm not saying that you
Speaker 3: know market wouldn't go back. In fact, our report last
Speaker 3: week we're saying, hey, hcim as said, China rallied thirty
Speaker 3: percent in two months, so investors need to be mindful
Speaker 3: of the potential correction in the future. But having said that,
Speaker 3: our view is still that this is probably a structural
Speaker 3: bull market that we are seeing. The correction dips in
Speaker 3: the structural rally in the next three five year horizon,
Speaker 3: and on.
Speaker 1: The structural part of it, because obviously this has to
Speaker 1: continue if you're betting on Chinese stocks, then I guess
Speaker 1: the question that is, you know, is there enough government
Speaker 1: support behind it, because a lot of it will depend
Speaker 1: on both government support of the sector in general, but
Speaker 1: also consumption.
Speaker 3: Yeah. Absolutely, on the government support side. It appears that
Speaker 3: government is kind of still evaluating the situation. Yes, we
Speaker 3: got ten percent tariffs in February and in March, and
Speaker 3: we might get more in April and April. Second, but
Speaker 3: exactly how is the impact of these terriffs. I think
Speaker 3: this is evaluating because since twenty eighteen, Chinese companies have
Speaker 3: been diversifying away from the US market, right, many have
Speaker 3: been building up factories in Asian market, in Mexico in
Speaker 3: other parts, and they've been you know, exporting more to
Speaker 3: say Middle East, more to other Asian economies, more to you.
Speaker 4: Know, global cuts. So how big.
Speaker 3: Is this terriff impact on China's export and export related activities,
Speaker 3: in terms of manufacturing compacts, in terms of employment. It
Speaker 3: probably still takes a few months to be seen. Also,
Speaker 3: I guess you know, market is expecting this meeting between
Speaker 3: presidents and President Trump, and in the meeting there might
Speaker 3: be more discussion about how the two country can work together, right.
Speaker 3: I think both leaders have kind of indicated that it's
Speaker 3: in the best interest of the two countries to work
Speaker 3: together rather than have a tense relationship. So the upcoming
Speaker 3: meeting between the two leaders will also be very important.
Speaker 3: I think at this stage, you know, from Chinese policy
Speaker 3: maker perspective, it looks like first couple months of micro
Speaker 3: data are fine, right, and property market in fact, in
Speaker 3: the past five months since October last year, was showing
Speaker 3: good trends in terms of better transaction volume, some improvement
Speaker 3: in transaction prices, especially in higher tier cities, and even
Speaker 3: the recent lend auction lens sell were very strong in
Speaker 3: January February, So it doesn't feel like, you know, they're
Speaker 3: in a rush to launch the policies. But as I mentioned,
Speaker 3: this is probably a policy put So if in the
Speaker 3: coming months, let's say, export jobs significantly or activity data
Speaker 3: consumption data jobs significantly, then regulator will probably do more.
Speaker 1: Okay, So you're saying that on the consumption front right now,
Speaker 1: things are looking okay. And they have these this arsenal
Speaker 1: policies in the background that they could deploy if necessary.
Speaker 1: But what about the support for the sector. If the
Speaker 1: stocks are being driven by deep Seek and this tech moment,
Speaker 1: is their government support to back this interest? I mean,
Speaker 1: this is a government that's very happy to intervene in
Speaker 1: private sector. So is that support there to kind of
Speaker 1: keep this rally going.
Speaker 3: I don't think we should beat on government support to
Speaker 3: keep the tech rally going. I don't think that's something
Speaker 3: Gum will do. So I would say generally speaking, China's
Speaker 3: industrial policy has been supporting this hard tech deep tech
Speaker 3: right from you know, semiconductor advanced manufacturing to AID. There
Speaker 3: is a general policy support and there are state fund
Speaker 3: to invest in these related areas. But Deep Seek in
Speaker 3: itself was more of an accident. It's not something to
Speaker 3: plan for, it's not something government policies support it.
Speaker 4: It's it's really the.
Speaker 3: Innovation by a private sector company, which it was not
Speaker 3: so much under radar screen for aio semiconductor or these innovasians. Right,
Speaker 3: it was a quant trading company. So yeah, I mean,
Speaker 3: I think so far the best performing stocks, their success
Speaker 3: are also more because of the bottom up innovation, the competition,
Speaker 3: the market forces. I don't think the support is something
Speaker 3: that will drive the tech value Asia.
Speaker 4: Another leg up.
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Speaker 2: and share. I want to draw analogies to the US
Speaker 2: led AI rally and China's AI rally. Now, when chat
Speaker 2: GPT came out, I think two or three years ago.
Speaker 2: A few months later, I remember Nvidia had a bumper
Speaker 2: earnings and then US analysts were raising earnings estimates quite aggressively.
Speaker 2: Now in China's equity driven rally, are we starting to
Speaker 2: see Chinese equity analysts raise estimates.
Speaker 3: Yes, but marginal compared to the type of multiple expansion
Speaker 3: that's expected. Right when I look at our analyst earnings
Speaker 3: result on some of the biggest tech companies, reported result
Speaker 3: is typically earning's upgrade its single digit, but po upgrade
Speaker 3: will be high double digit, so a lot of its
Speaker 3: multiple expansion. So in my recent report, I showed the
Speaker 3: valuation gap between the Magnificent and seven the US big
Speaker 3: tech versus the top ten Chinese tech companies. Beginning of
Speaker 3: the year or end of last year, the Magnificent sevens
Speaker 3: pe multiple were trading at something like one hundred twenty
Speaker 3: one hundred and thirty percent premium to the Chinese tech names.
Speaker 3: Within two three months now the value gap is narrowed
Speaker 3: to only thirty percent, So a lot of the China
Speaker 3: tech rally was more by multiple expansion, not so much
Speaker 3: of earnings. But you know, to be fair, they were
Speaker 3: training at a very depressed valuation multiple to start with.
Speaker 2: Right now and this rally. Do you think that most
Speaker 2: investors caught this rally because it was really quick. If
Speaker 2: you look at Ali Barber's share price, I think it
Speaker 2: went up sort of sixty eighty percent in the space.
Speaker 3: And in two months.
Speaker 2: In two months now, institutional investors, it's pretty much too
Speaker 2: quick to catch this rally. What's your sense?
Speaker 3: Yeah, I mean, I guess you know, hatch fund investors
Speaker 3: probably respond much more quickly.
Speaker 4: I think for long.
Speaker 3: Only investor it is really hard, partly because, like you mentioned,
Speaker 3: the China rally happened very very rapidly, and it's a
Speaker 3: very narrow rally. It's basically a handful of tech stocks
Speaker 3: that's done really really well. I mean even ten cent
Speaker 3: end the performed during the tech rally, and even if
Speaker 3: you overweight China Tech, if you are not in those
Speaker 3: few names that done exceptionally well, you might still end
Speaker 3: up perform. Also, I know some like Greater China Fund
Speaker 3: that would have Taiwanese stocks in the portfolio a right
Speaker 3: TSMC would be one of the big positions again this year,
Speaker 3: unless you are one hundred percent in China Tech, you
Speaker 3: would end up performed again because China alone was the
Speaker 3: best performing market. So I think a lot of investors,
Speaker 3: especially lonely investors, are having a sort of challenging time
Speaker 3: in terms of trying to outperform the rally. But nonetheless,
Speaker 3: China market going up with increasing interest and hopefully more
Speaker 3: fund the inflow is still a good scene for the market.
Speaker 1: Did you feel that energy You were just at a
Speaker 1: tech conference? Was it in Taiwan?
Speaker 4: Yeah?
Speaker 1: Yeah, you're at a Tech Conference in Taiwan. Can you
Speaker 1: kind of take us behind the scenes of that. What
Speaker 1: were people saying, what were they discussing.
Speaker 3: Yeah, so this is our twenty eighth Asian Tech conference,
Speaker 3: and this year we again had nearly record high number
Speaker 3: of investors and corporate attending. So the interest level certainly
Speaker 3: still very very high. I think generally people are still
Speaker 3: very Polish, very confident on the future of AI. Right.
Speaker 3: The deep seek actually kind of democratized the technology so
Speaker 3: that there will be more application signarios, you know, more
Speaker 3: smaller companies are able to leverage AI and have AI demands.
Speaker 3: So there is this general optimism on the future of AI,
Speaker 3: you know, Agente tic Ai, Agi whatever, super AI. But
Speaker 3: on the other side, I think from an equity market perspective.
Speaker 4: They are all more mixed feeling.
Speaker 3: About the stock performance in the sense that whether it's
Speaker 3: the US tech names or Taiwanese tech names, when you
Speaker 3: speak to the corporate the guidance remain very positive, very confident.
Speaker 4: But when I look at their.
Speaker 3: Share prices, share prices actually struggle to suffered suffered from
Speaker 3: multiple de rating, right, which is kind of the opposite
Speaker 3: to the Chinese tech stocks. So at this level what
Speaker 3: do we do right reduce the exposure to US tech
Speaker 3: Taiwanese tech to trade the rally of China tech or
Speaker 3: do we hold on to our position of the US
Speaker 3: taiwan tech. That's really a quite challenging question.
Speaker 4: What's the answer.
Speaker 3: I don't think there's a concise answer, but I would
Speaker 3: say so far based on the past few days sentiment,
Speaker 3: it tend to be let's hold on to our US
Speaker 3: and Taiwanese tack and do not trace the stocks that
Speaker 3: already went up eighty percent in two months. And I
Speaker 3: think the final part of the conference is there's this
Speaker 3: concern about or discussion debate about how countries, especially like
Speaker 3: US China should or can work together in the AI
Speaker 3: era right, because AI brings a lot of opportunities benefit
Speaker 3: but it does bring risks and challenges as well. So
Speaker 3: you know, the two biggest players US and China in
Speaker 3: this changing world, if they can work together in terms
Speaker 3: of managing the risk, setting the standard, cooperate, it will
Speaker 3: probably benefit the broad their human society. On the other side,
Speaker 3: the concern is if the two countries are more in
Speaker 3: a sort of competitive mood rather than working with each other,
Speaker 3: then it might not be the best usage of resources
Speaker 3: might not be the best for promoting innovation and might
Speaker 3: not be the best for managing risks. In fact, one
Speaker 3: of their experts said, managing the risk in AI is
Speaker 3: almost managing like nuclear related risk. Country nation states are
Speaker 3: not your biggest enemy because countries are generally going to
Speaker 3: be responsible of how they use their weapons or resources
Speaker 3: or their powers. The real danger are those like rogue actors,
Speaker 3: right that.
Speaker 4: They could really go on extreme.
Speaker 3: And take advantage or manipulate the capability the powers. So
Speaker 3: the big countries should really work together to prevent the
Speaker 3: risk from these rogue actors rogue players, rather than fighting
Speaker 3: with each other on country level.
Speaker 2: When you wanted to take a step back, sounds like
Speaker 2: you were structurally on China, and that's sort of like
Speaker 2: a medium term view. But you did come out with
Speaker 2: the report recently and you did suggest it could be
Speaker 2: a market correction.
Speaker 3: You explain, yeah, so again, you know, market price is
Speaker 3: reflective earnings and multiple as our earlier conversation went through.
Speaker 3: So far, we see some improvement in earnings in tech
Speaker 3: related names, but there's still broader level many other company sectors,
Speaker 3: their earnings still struggle, and we'll probably see more of
Speaker 3: that in the coming weeks of the earning season, and
Speaker 3: with the uncertainty of terriffs trade wards in the coming quarters,
Speaker 3: things my need to go worse and before the governor
Speaker 3: stepping with bigger stimulars to put the floor and before
Speaker 3: the company further adjust their business model to handle. So
Speaker 3: coming quarters chances are China's nominal GDP growth will still
Speaker 3: struggle and the pressure many corporates earnings were still structural pressure.
Speaker 3: Whereas equity market, inspired by the tech breakthrough inspired by
Speaker 3: the policy, certainty already pricing a lot of positive news
Speaker 3: and had a very sharp rally, to the extent that
Speaker 3: valuation multiple of MSI China Index is now trading at
Speaker 3: twelve times forward pe, which was the previous peak in
Speaker 3: October seventh, last year's level, which was the peak at
Speaker 3: post reopening high in January level January twenty twenty three level.
Speaker 3: So we are a bit cootious that at this valuation multiple,
Speaker 3: which looks fair to us right, good news are being pricing.
Speaker 3: So the policy put the technological breakthrough the potentially structural
Speaker 3: upcycle in the next few years, whereas the near term
Speaker 3: challenges has largely been overlooked in the past couple of
Speaker 3: months and one good news are in the price, bad
Speaker 3: news are not. Then what could potentially come next is
Speaker 3: markets start to pricing these negative news is especially the
Speaker 3: challenging and fundamental things in terms of the macro data,
Speaker 3: in terms of the earning data. And also we are
Speaker 3: facing this event of April second, right, this global reciprocal tariff.
Speaker 3: For what does it mean for China? We still need
Speaker 3: to evaluate. So that's why we would advise the investor
Speaker 3: for the short term to take a more courtious view
Speaker 3: and having the evaluation to wait. Stock market probably need
Speaker 3: to take a pause, wait for the fundamental to catch
Speaker 3: up before the sheer prices can a new highs.
Speaker 1: Again, I'm wondering how much the US in this case
Speaker 1: because you had mentioned this earlier, but this idea of
Speaker 1: the flip in sentiment between certainty in the US versus China,
Speaker 1: and I wonder given the reciprocal tariffs and just tariffs
Speaker 1: in general, and investors looking at the stock market trying
Speaker 1: to figure out what's going on in the US. We've
Speaker 1: seen this erosion of American exceptionalism and the American exceptionalism
Speaker 1: trade and I wonder how much of that might be
Speaker 1: able to create a bit of a buffer and in
Speaker 1: fact help Chinese equities because we've seen that with European
Speaker 1: stocks too. It sounds like everyone is just leave. It's
Speaker 1: there's that sucking sound. Is money leaving the US.
Speaker 2: And I think there was a survey by your firm
Speaker 2: that suggests record money is leaving the US.
Speaker 3: Yes, yeah, I think that played out a year to
Speaker 3: date already to some extent. And that's why the European stocks,
Speaker 3: the China stocks are doing so well. Right the reverse
Speaker 3: of fund flow two years ago in twenty twenty two,
Speaker 3: twenty twenty three, it's about sell China by USAI, selled
Speaker 3: China by Japan, sell China by India. Now, you know,
Speaker 3: when people start to reduce their concentration on US that
Speaker 3: many other markets actually benefit, especially European and China market.
Speaker 3: But having said that, you know, US remains to be
Speaker 3: a very very big part of global investors benchmark. Right
Speaker 3: so within MSAI world, US is still like sixty three
Speaker 3: sixty four.
Speaker 4: Percent of the benchmark.
Speaker 3: China, after the reason of our performance, is still only
Speaker 3: three to four percent of the benchmark. So from any
Speaker 3: global or US investor perspective, it's still essentially critical to
Speaker 3: get the US market right, and after the big sale
Speaker 3: of these US big tax stocks, I think the question
Speaker 3: is at this level, do we continue to sell US
Speaker 3: to long China or do we take away and see
Speaker 3: mode right way to see you know, will the fat
Speaker 3: cut rate in May? And does the federate cut helps
Speaker 3: with the US stock market? Also together with the US
Speaker 3: dollar index, right the DXY we can't from one O
Speaker 3: night to one O five within the first two three
Speaker 3: months of the year. But it looks like dollar index
Speaker 3: is also kind of stable light thing, so that might
Speaker 3: slow down the fund outflow from US to other market.
Speaker 3: But finally, I think our US rategy review is also
Speaker 3: when you sell US equity, you don't necessarily need to
Speaker 3: go to international equities. You might go buy bond or
Speaker 3: you might stay with US money market found. So I
Speaker 3: think the first big wave of money leaving US to
Speaker 3: buy international including China equities, probably played out with the
Speaker 3: narrow evaluation gap between US and China tax stocks. I
Speaker 3: suspect will see a period of pause and reevaluation and
Speaker 3: waiting for the clarity on the US policies. And also
Speaker 3: two tome extent on the US economy. Right, it is
Speaker 3: the US economy, consumer space remains sound and solid, or
Speaker 3: is the US economy really heading to recessions? So investors
Speaker 3: need to evaluate those before they take the next big
Speaker 3: step of rotating away from the US equities.
Speaker 2: You did mention Europe, and it's quite interesting because China's
Speaker 2: had a fantastic rally, but it feels like China's almost
Speaker 2: been overshadowed by events in Europe like the bundjiolds of skyrocketed.
Speaker 2: Everyone's buying German defense stocks, infrastructure. If you do get
Speaker 2: this switch out of US, do you think investors will
Speaker 2: prefer Europe or China?
Speaker 3: I think, from my understanding, going to Europe will be
Speaker 3: an easier call for the US investor. One is partly because,
Speaker 3: again from a benchmark perspective, European market, if you add
Speaker 3: up you know, the Germany, the UK, you know, the
Speaker 3: French market at the market within the MSAI World Index
Speaker 3: is actually a bigger part of the index than China,
Speaker 3: which is only you know, three to four percent. So
Speaker 3: from an index risk perspective, it's important to get European
Speaker 3: market right. But also secondly, for the European market there's
Speaker 3: less concern of like the tail risks, say Sunction risk.
Speaker 3: Earlier this month, I was speaking to a COO of
Speaker 3: a global long the investor, and he's interested in the
Speaker 3: China Deep six story. He's interested in the China Internet names,
Speaker 3: which he used to have big position in. But now
Speaker 3: for him, the concern is still like what if some
Speaker 3: of these internet stocks got added down to various lists? Right?
Speaker 3: We saw Tencent add on to the Defense Department's list
Speaker 3: in January this year, and from the narrative in US,
Speaker 3: it's still that US capital should not be funding the
Speaker 3: indigenous development of China's technology a icon and computing. So
Speaker 3: you know, among the US investors, there's still this concern
Speaker 3: that some of the best technology companies in China might
Speaker 3: be added on to various lists which give them sort
Speaker 3: of some reputation risk, or if it adds on to
Speaker 3: one of the investment band then it's a huge risk
Speaker 3: for them. So that's some of the concerns holding back
Speaker 3: US investor from buying or chasing the China tech rally.
Speaker 2: I did want to ask you about humanoid or robotic stocks.
Speaker 2: What's going on there? It seems to be some of
Speaker 2: the hottest stocks of being in this sector. Can you
Speaker 2: tell us is what are these companies that make these
Speaker 2: humanoid robots.
Speaker 3: Well, you know, I'm not supposed to recommend individual stocks.
Speaker 3: Our second analysis does put out the report. I think
Speaker 3: one is manufacturing has been China's strengths. Right, China has
Speaker 3: a very complete suite along the old supply chain of manufacturing.
Speaker 3: So when China is ready to produce these humanoid robots,
Speaker 3: China probably has the most complete upstream, downstream component equipment,
Speaker 3: everything together and in a very cost efficient way of
Speaker 3: producing them in volume at affordable costs. So there is
Speaker 3: a natural advantage. And I think you know the reason
Speaker 3: breakthrough in deep Seek in Ai and some of China's
Speaker 3: robotic company like uned Trees Robots was doing a big
Speaker 3: dancing in the Spring Festival gala in China, which which
Speaker 3: was pretty impressive, so that made people also more excited
Speaker 3: about the theme. But having said that, from a pure
Speaker 3: stock market perspective, the feedback from investors is this theme
Speaker 3: has been.
Speaker 4: Again in China market.
Speaker 3: People tend to play a three five year theme in
Speaker 3: like three five weeks, so many of the stocks already
Speaker 3: went up multiple times before they even start to produce robots.
Speaker 3: So against stock market probably got overly excited on some
Speaker 3: of these names.
Speaker 1: Great, well, it's been very wide range conversation.
Speaker 4: It's been great. Thanks so much for taking so much
Speaker 4: for having me.
Speaker 1: Thanks weing you've been listening to Asia Soundrek from Bloomberg Intelligence.
Speaker 2: I'm Carte Btriva on Hong Kong and I'm John Lee,
Speaker 2: also in Hong Kong. You can find our episodes on
Speaker 2: Apple Podcasts, Spotify, or wherever you get your podcasts. His
Speaker 2: podcast was also produced and edited by Clara Chen.
Speaker 4: Thanks for listening, See you next time.