Summary of the Conference Call Industry Overview - The focus is on the **China A-share Equity Strategy**, particularly the **CSI-300 index** which is expected to perform positively until the end of 2026 [2][5][6]. Key Points and Arguments - **Market Outlook**: - The CSI-300 index is projected to have a **26% to 32% upside** by the end of 2026, based on a re-rating to +1.5SD/+2SD relative to the October 17 close [2][7]. - The expected **consensus EPS growth rates** for 2026 and 2027 are **13.4% and 11.8%**, respectively [2][7]. - **Liquidity and Market Dynamics**: - A-share liquidity remains healthy, with the **A-share velocity** easing to **4%** from a peak of **6.8%** [5][17]. - The **margin financing balance** increased from **Rmb2.3 trillion** in early September to **Rmb2.4 trillion** in early October, indicating a rise from **4.7% to 5%** of the A-share free-float market cap [5][22]. - **Net inflows** into A-share ETFs totaled **Rmb17 billion** from October 13 to 16, with specific sectors like banks and semiconductors seeing the most inflow [5][37]. - **Potential Risks**: - Risks are primarily associated with uncertainties in **US-China trade talks** [2][5]. - The ongoing **US-China tensions** since October 9 are reminiscent of earlier market corrections, suggesting a cautious approach [5][6]. - **Investment Opportunities**: - The report highlights **IT and healthcare A-share innovators** as potential investment opportunities, focusing on metrics such as market capitalization and overseas revenue [2][5][11][12]. - Specific stock screens include: - **IT localists** and **globalists** in sectors like semiconductors and smartphone supply chains [11]. - **Healthcare globalists** in innovative drugs and healthcare equipment [12]. - Top A-share listings by market cap in sectors such as autos, batteries, and chemicals [14]. Additional Important Insights - The **4th Plenary Session** of the 20th Central Committee is expected to provide insights into government policies that could impact market sentiment [5][6]. - The **risk-free rate** remains stable, which may support investors' risk appetite despite profit-taking observed in household savings [5][26]. - Upcoming key events include meetings between Chinese and US officials, which could influence market dynamics [6][5]. This summary encapsulates the essential insights from the conference call, focusing on the outlook for the A-share market, liquidity conditions, potential risks, and investment opportunities within the sector.

Asia Pacific Equity Research 12 June 2025 This material is neither intended to be distributed to Mainland China investors nor to provide securities investment consultancy services within the territory of Mainland China. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. China Insurance Redefining Consumption: From Savings to Service, transforming China's insurance consumption Following the JPM China economics team's note on 'China: Ris ...

Consumption Trends - Consumption remains the primary driver of economic growth in China, with service consumption emerging as a new growth engine [1] - The "trade-in" policy is highlighted as a significant factor for consumption growth in 2024, driving industrial upgrades and transformation [1][2] - The trade-in program will be expanded in 2025, with broader subsidy coverage and initiatives to enhance service consumption quality [2] Challenges in Consumption - The main challenge for commodity consumption is the softer consumer purchasing power and willingness, affecting demand [3] - For service consumption, the challenge lies on the supply side, with insufficient high-quality services available [3] Company Strategies - Meituan's CEO emphasized a focus on food & grocery retail, international expansion, and technology for the next decade [4] - Alibaba's Hema is expanding its Freshippo Stores, planning to open about 100 new stores and enter dozens of new cities [4] - Alibaba's Ele.me is investing over 1 billion yuan (approximately $140 million) to support merchants through various initiatives [5] Market Expansion - Grab Holdings is acquiring the supermarket chain Everrise in Malaysia to enhance its grocery business and digitize operations [6] Technological Advancements - Alibaba has released an open-sourced inference model, QwQ-32B, achieving breakthroughs in various capabilities while reducing deployment costs [7] - Tencent has launched an open-source image-to-video model, allowing businesses and developers to apply for API access [8] - Alibaba Cloud aims to increase the number of Japanese projects utilizing its generative AI models to over 1,000 within three years [8]