Core Insights - UBS Investment Bank's China equity strategy head Wang Zonghao noted increased interest in Chinese stocks during a recent two-week roadshow in Europe and Asia [1] - European investors have shifted from a low allocation to a neutral stance on China, with some now overweighting Chinese stocks, a significant change from previous roadshows [1] - Despite global uncertainties, investors generally find Chinese stocks attractive, but there remains a cautious approach towards emerging markets, particularly China, with a desire for sustainable, consumption-driven economic growth [1] Investment Trends - The internet sector remains the most favored among investors, who agree that leading Chinese internet companies are among the best ways to gain exposure to AI themes [1] - There is a growing interest in high-quality blue-chip companies that have either become or have the potential to become global or domestic leaders [1] - Investor focus is increasingly on sectors such as internet, technology, select global leaders, and domestic companies with strong fundamentals and limited tariff exposure [1]

ETF Market Overview - The performance of ETFs has been generally positive in the last two weeks, with the exception of the Sci-Tech 100 and Sci-Tech 50 ETFs. The largest gains were seen in ETFs tracking the Hang Seng Index and the CSI 2000, while the manufacturing sector ETFs showed the highest increase among industry and thematic products [3][11]. - In terms of fund flows, major broad-based ETFs experienced significant net inflows, particularly the CSI 300 and the SSE 50 ETFs. After a substantial outflow at the beginning of the year, technology ETFs have shifted to net inflows since March, although the inflow rate has slowed in the last two weeks [3][11]. Fund Flow Analysis - As of April 25, 2025, a total of 15 new ETFs were launched, with a combined issuance of 8.99 billion shares, all of which are stock ETFs. Compared to the end of 2024, the scale of various ETFs has increased, with commodity ETFs, bond ETFs, industry + dividend ETFs, QDII ETFs, and broad-based ETFs rising by 120.33%, 38.17%, 14.44%, 7.58%, and 1.14% respectively [21][22]. - The cumulative fund flow for broad-based ETFs has shown a trend of inflows since early April 2025, particularly for the CSI 300, CSI 1000, and CSI 2000 ETFs, with the CSI 300 ETF seeing a net inflow exceeding 130 billion [12][14]. Thematic ETF Performance - The technology-themed ETFs have shown strong performance, particularly those tracking the new exchange's Southeast Asia Technology Index, with overseas technology ETFs outperforming domestic ones. In terms of fund flows, ETFs tracking the Hang Seng Technology Index have seen significant net inflows, while those tracking 5G communications have experienced outflows [27][28]. - The healthcare-themed ETFs have also performed well, with those tracking innovative drug indices seeing notable gains. However, funds have shifted from inflows to outflows for medical, military, dividend, and consumer ETFs in the last two weeks [16][28]. ETF Product Structure - The structure of newly launched ETFs indicates a growing trend towards thematic and sector-specific investments, with a notable increase in the issuance of stock ETFs. The overall market for ETFs is expanding, reflecting a shift in investor preferences towards diversified and thematic investment strategies [21][22].

Market Overview - The report indicates that the A-share market is currently experiencing a phase of adjustment, influenced by uncertainties related to overseas tariffs and the upcoming earnings season, suggesting that the downward trend may not yet be over [3][9] - The total trading volume in the market remains below 1.2 trillion yuan, indicating a lack of strength in the overall rebound, with market participants showing a cautious sentiment [3][11] Industry Insights - Data from the National Bureau of Statistics shows that in January-February 2025, the total profit of industrial enterprises above designated size was 910.99 billion yuan, a year-on-year decrease of 0.3%. For the entire year of 2024, the total profit was 74,310.50 billion yuan, down 3.3% year-on-year, although December 2024 saw a turnaround with profits increasing by 11.0% compared to November [4][9] - The chemical sector has shown strength, particularly with the price of chemical products like double-seasoned tetramethylol increasing significantly, from 20,000 yuan per ton in October 2024 to 55,000 yuan per ton in March 2025, marking a 175% increase [8] Investment Strategy - The report suggests avoiding stocks that have been excessively speculated without clear earnings support, while focusing on sectors expected to outperform during the earnings season [5][10] - It recommends positioning in sectors such as large financials, cyclical stocks, and high-dividend or undervalued consumer stocks during market dips, while maintaining flexibility in trading strategies to capitalize on market fluctuations [5][10] Future Outlook - The report anticipates that the current market adjustment may create favorable buying opportunities in the future, with a medium to long-term positive outlook supported by economic resilience and ongoing policy support [4][10] - The overall market sentiment is expected to remain cautious in the short term, but the potential for a gradual recovery exists, indicating a slow bull market trend [10]