Summary of Key Points from the Conference Call Industry and Company Overview - The focus is on the Chinese equity market, particularly in relation to US investor interest and the implications of regulatory actions on companies like Trip.com [2][3][10]. Core Insights and Arguments 1. **US Investor Interest in Chinese Equities**: There is a growing interest from US investors in diversifying their portfolios to include Chinese equities, with expectations of potential upside from government measures to boost household income and consumption [2][4]. 2. **Trip.com Anti-Trust Investigations**: Concerns were raised regarding the anti-trust investigations into Trip.com, but it is viewed as a company-specific issue rather than a sector-wide problem. Historical trends suggest that affected companies may see their share prices underperform for 4-6 months [3][10]. 3. **Economic Outlook Alignment**: US investors' views on the Chinese economy align with domestic investors, acknowledging challenges like the property downturn but not anticipating a systemic breakdown. There is hope for more stimulus to boost consumption [4][5]. 4. **Market Sentiment and Regulatory Actions**: Recent tightening of regulations in the A-share market has cooled sentiment, but these measures are seen as temporary, aimed at fostering a sustainable bull market rather than suppressing long-term growth [5][20]. 5. **Performance Expectations Leading to NPC Meeting**: Historically, the A-share market performs well leading up to the National People's Congress (NPC) meetings, and there is an expectation for a buoyant market in the first half of the year due to institutional inflows and retail participation [5][33]. 6. **Sector Preferences**: The model portfolio has shifted to favor copper over the solar supply chain, reflecting better supply/demand dynamics and a thematic play on global energy shortages [8][9]. 7. **Bullish and Bearish Scenarios for 2026**: - **Base Case**: Assumes 10% earnings growth driven by 5% revenue growth and margin expansion [29]. - **Bull Case**: Envisions a global AI boom leading to higher productivity and earnings growth, with a potential re-rating of valuations [30]. - **Bear Case**: Considers a global AI bust leading to a significant selloff in equities, particularly impacting AI-related stocks in the MSCI China index [31]. 8. **Going Global Theme**: US investors are interested in "going abroad" stocks, which are high-quality exporters with significant overseas revenue exposure, as domestic demand remains subdued [50][55]. Other Important Insights 1. **Regulatory Environment**: The tightening of margin financing requirements is seen as a measure to prevent market overheating, with historical highs in A-share market turnover and margin financing balance [20][21]. 2. **Market Performance Around Key Events**: The HK equity market typically performs better before the Chinese New Year, while A-shares tend to do well before NPC meetings, with expectations of policy stimulus influencing market reactions [46][47]. 3. **Valuation and Risk Considerations**: Risks facing Chinese equities include a potential hard landing in the property market and slow structural reforms. Excessive stimulus could hinder the transition to a consumption-driven economy [57]. This summary encapsulates the key points discussed in the conference call, highlighting the current sentiment and outlook for the Chinese equity market, particularly in relation to US investors and regulatory impacts.