Core Insights - The article highlights the expertise of Fred Piard, a quantitative analyst with over 30 years in technology, focusing on data-driven systematic investment strategies since 2010 [1]. Group 1: Expertise and Background - Fred Piard has authored three books and runs an investing group called Quantitative Risk & Value, which focuses on quality dividend stocks and innovative tech companies [1]. - The investing group also provides market risk indicators, real estate strategies, bond strategies, and income strategies in closed-end funds [1].

Economic Strategy & Policy Focus - China's top policymakers are creating a 5-year roadmap, focusing on economic priorities from 2026 to 2030 [1][2] - The primary goal is to transform China into a global tech leader, dominating in technologies like AI, semiconductors, robotics, and new energy [3] - There's an expectation that the 5-year plan will acknowledge the need to encourage more household consumption, potentially setting consumption growth targets at a local level [4] Economic Performance & Stimulus - Q3 economic growth came in at 48%, slightly slower than Q2, with an overall economic growth target of 5% [6] - Many economists believe that there won't be much more stimulus for the rest of the year, partly due to the Q3 economic growth number [6]

Group 1 - The article discusses Fred Piard's investment group, Quantitative Risk & Value, which focuses on quality dividend stocks and tech innovation companies [1] - Fred Piard has over 30 years of experience in technology and has been investing in data-driven systematic strategies since 2010 [1] - The investment group also provides market risk indicators, real estate strategies, bond strategies, and income strategies in closed-end funds [1]

Investment Rating - The report maintains an "Overweight" (OW) rating for several sectors including Communication Services, Consumer Discretionary, Financials, Healthcare, and Industrials, while underweighting (UW) Energy and Utilities [7][11]. Core Insights - The report anticipates a range-bound MXCN (70-80) in the near term with potential upside in the second half of 2025, driven by factors such as strong southbound inflows into Hong Kong and a possible resolution in US-China trade negotiations [6][22]. - The forecast for MXCN/CSI300 is projected to reach HK$80/Rmb4,150 (+5.1%/5.8% from the previous close) in the base case and HK$89/Rmb4,420 (+16.8%/12.7% from the previous close) in the upside case by the end of 2025 [6][22]. - The report highlights a shift in consumer preferences from "affordable treats" to "affordable experiences," indicating a potential investment opportunity in sectors related to learning and at-home entertainment [6][8]. Summary by Sections Key Drivers for 2H25 - The report identifies key drivers for the second half of 2025, including a rebound in GDP growth and a rise in the share of sub-sectors in Recovery and Expansion [17][20]. - The business cycle profile of China equity is noted to have troughed in 3Q24, with a significant increase in the number of sectors showing recovery [17][20]. Earnings Outlook & Sector Weights - The report predicts upside for MXCN EPS compared to consensus, while forecasting downside for CSI300/CSI500/CSI1000 EPS growth due to differing sector exposures [6][7]. - Sector weights indicate a return to an Overweight stance on IT, while maintaining Overweight on Communications Services, Discretionary, Healthcare, and Materials [6][7]. Thematic Stock Screens - The report emphasizes several themes, including the rise of high yielders favored by onshore investors and the potential for financial sector consolidation [6][11]. - Top picks for 2H25 include Tencent, Alibaba, and Innovent, among others, reflecting a focus on companies with strong growth potential and favorable market conditions [6][7][11].