Core Viewpoint - The report from Wellington Management highlights that "China" is emerging as a key investment opportunity as the narrative of "American exceptionalism" fades, evidenced by global fund managers reducing their allocations to U.S. stocks [1]. Group 1: Reasons to Reassess Chinese Stock Allocation - Attractive valuations and upside potential: Chinese stocks are currently trading at potentially attractive prices, with early signs of profit turning points and low foreign ownership ratios, which may attract international investors [2]. - Continuous improvement in fundamentals: Chinese companies are optimizing capital allocation according to global best practices, reflected in increased dividend payout ratios, stock buybacks, and stricter debt management, enhancing the resilience of balance sheets [3]. - More resilient economic model: The ongoing deleveraging in the real estate market and the government's willingness to use policy tools are reducing systemic financial risks, particularly in the banking sector [4]. Group 2: Policy and Economic Support - Policy shift supporting the private sector: Chinese policymakers are increasingly focusing on the development of private enterprises, enhancing support for innovation, and accelerating the transition to a knowledge-intensive economy [5]. - Counter-cyclical consumer resilience: Although consumer confidence is still recovering, there are signs of improvement, with Chinese households maintaining high savings rates to support consumption [6]. - Stabilization of the real estate market: The downward trend in the real estate market appears to have bottomed out, with signs of stability and even recovery in major cities [8]. Group 3: Financial and Investment Opportunities - Fiscal support from local governments: With local government finances stabilizing, an increase in local government bond issuance is expected to support infrastructure construction and consumption, thereby boosting domestic demand [9]. - Advantages of diversified investments: Chinese stocks have a low correlation with global markets, providing significant diversification benefits for investment portfolios, which may intensify with the ongoing trend of de-globalization [10]. - Reduced reliance on U.S. capital markets: Chinese companies are systematically decreasing their dependence on U.S. capital markets, shifting their listing locations to domestic markets or Hong Kong, creating more diversified investment opportunities [11]. - Deepening global trade ties beyond the U.S.: China is actively seeking to diversify its trade partners, particularly strengthening economic ties with Europe, with a consensus reached on deepening bilateral economic relations by early 2025 [12].

Market Performance - On June 11, Hong Kong's three major stock indices all rose, with the Hang Seng Index up 0.84% to 24,366.94 points, the Hang Seng Tech Index up 1.09% to 5,451.20 points, and the Hang Seng China Enterprises Index up 1.12% to 8,865.72 points. The total market turnover was HKD 235.2 billion, with net inflows from southbound funds amounting to HKD 1.376 billion [2]. Company Highlights - China Hongqiao rose 4.61%, China Life increased by 4.58%, and BYD gained 3.83%, leading the blue-chip stocks. The expectation of asset restructuring for China Hongqiao has driven a revaluation [4]. - Bubble Mart reached a historical high, closing at HKD 269.80 with a gain of 4.25%. According to a report from CICC (Hong Kong), the company is expected to achieve a net profit of RMB 7 billion by 2025, exceeding market expectations by approximately 15% due to underestimated overseas expansion [12]. Industry Trends - The Hang Seng Industry Index showed most sectors rising, with the materials sector up 2.66%, energy sector up 1.43%, and financial sector up 1.17%. Conversely, the consumer staples sector fell by 0.92%, healthcare sector down 0.65%, and utilities sector down 0.21% [6]. - The Wind concept sectors mostly rose, with the Foxconn Index up 5.19%, new materials up 4.3%, and Chinese brokerage firms up 4.14%. The domestic retail index led the declines, down 3.41% [8]. Investment Sentiment - According to Morgan Stanley's latest report, international investors are seeking to diversify their portfolios, showing a stronger willingness to allocate to Chinese stocks due to concerns about missing out on China's technological advancements. The report indicates that there is significant room for increased investment as international exposure to China remains relatively low [10]. - CITIC Securities expressed optimism about the media and gaming sectors, highlighting that these sectors are among the best emerging consumer segments, with valuations still considered low. The firm believes that the cultural export initiatives supported by policy will further enhance growth in these sectors [20].