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american wall street giants are bullish on chinese assets!

according to the latest news, blackrock raised its rating on chinese stocks from neutral to overweight. blackrock investment research said there is still room for a moderate increase in chinese stocks in the short term, given the near-record discount of chinese stocks to developed market stocks and the presence of catalysts that could spur investors back into the market.

other foreign media reported that global investors are preparing to return to china. investors in the group, which manages more than a trillion dollars in client funds, say the chinese government's efforts to attract more cash into the stock market and stimulate consumer spending have increased the appeal of chinese companies. gabriel sacks, emerging markets portfolio manager at british asset manager abrdn, said the group bought chinese stocks "selectively" last week.

in addition, goldman sachs pointed out in its latest research report that the combined market value of alibaba, pinduoduo, and jd.com is only one-quarter of amazon. in the context of continuous release of favorable policies and continued market enthusiasm, there is room for revaluation of the value of chinese e-commerce huge.

goldman sachs ranks e-commerce stocks and gaming stocks as the most preferred sectors of the mainland internet industry, and has also raised the target prices of alibaba, pinduoduo, jd.com, tencent, and meituan.

this evening, the three major u.s. stock indexes fell collectively. as of press time, the nasdaq index fell by more than 1%. however, chinese assets bucked the trend and rose. the nasdaq china golden dragon index rose nearly 2%, bilibili, beike, li auto, etc. rose more than 5%, and jd.com, nio, etc. rose more than 3%.

check out the detailed report!

global investors prepare to return to china

the latest news shows that blackrock raised its rating on chinese stocks from neutral to overweight on monday. the agency believes that given that the discount of chinese stocks relative to developed market stocks is close to record levels and there are catalysts that may stimulate investors to re-enter the market, there is still room for moderate accumulation of chinese stocks in the short term. blackrock investment institute said significant fiscal stimulus may be coming, prompting investors to take action. it is understood that blackrock is one of the world's largest asset management groups, with a management scale of more than 10 trillion us dollars.

in addition, reuters published an article on october 1 stating that global investors are preparing to bet on china again, which is a major change in sentiment triggered by beijing's measures to reverse the economic slowdown and revive long-term interest in the chinese stock market.

the media said it is still early days. investors in the group, which manages more than a trillion dollars in client funds, said the chinese government’s measures to attract more cash into the stock market and stimulate consumer spending have strengthened the still low valuations of chinese companies. attraction.

"we will be very disciplined, but overall we feel there is more upside than downside," said gabriel sacks, emerging markets portfolio manager at british asset manager abrdn, which manages 506 billion pounds ($677 billion). , he said the group had "selectively" bought chinese stocks last week and would await more detailed policy plans from beijing, days after some unusually candid pledges of economic support led to sharp gains in chinese stocks.

luca paolini, chief strategist at pictet asset management, said investors may have overlooked the prospect of u.s. interest rate cuts boosting global demand and chinese exports. pictet asset management oversees more than 260 billion euros ($291 billion) of client funds.

noel o'halloran, chief investment officer at kbi global investors, said he started buying chinese stocks this summer on valuation grounds and would not yet make a profit.

bullish on chinese e-commerce stocks

on september 30, goldman sachs released a research report, aligning e-commerce stocks with gaming stocks as the most preferred sectors of mainland china’s internet industry. goldman sachs pointed out that as the chinese government launches strong growth-promoting policies and the e-commerce market environment gradually normalizes, the market share of major e-commerce platforms has stabilized, and the e-commerce industry will become one of the most important areas for revaluation in china’s internet sector. one.

goldman sachs said that the median expected 12-month price-earnings ratio of china's internet industry is 14.3 times, which is still a discount of more than 40% compared with the u.s. internet. however, the valuations of e-commerce companies such as alibaba, pinduoduo and jd.com are only 9-12 times, which is still lower than the median of china’s internet industry. there is huge potential for value revaluation.

at present, the combined market value of alibaba, pinduoduo, and jd.com is only us$500 billion. in comparison, amazon’s market value is as high as us$2 trillion. in other words, the combined market value of china’s three major e-commerce giants is only four times that of amazon. one.

at present, the valuations of china's top 20 internet companies have been restored, and the market value has exceeded the high point in january 2023. however, the combined 12-month expected net profits of these companies increased by 67% compared with january 2023 expectations. goldman sachs said that in the past week, the stock prices of chinese e-commerce companies have risen significantly by 16% to 32%. however, given the industry's solid profit growth, low valuations, and support from government policies, goldman sachs believes that this rebound may be more sustainable.

goldman sachs said that the pattern of china’s e-commerce market is further normalizing. with the in-depth development of live streaming, competition among e-commerce platforms has become increasingly fierce, but leading companies have responded effectively. taobao, tmall and jd retail have successfully defended their respective market shares in recent months.

the e-commerce industry will become one of the most important areas for revaluation in china's internet sector. benefiting from the acceleration of online transformation and the promotion of advertising technology, the industry's growth rate is expected to continue to be higher than china's gdp and consumption growth. goldman sachs predicts that by 2025, the e-commerce industry's gross merchandise volume (gmv) will grow by 7%, advertising revenue will grow by 12%, and domestic platform profits will grow by 13%.

goldman sachs pointed out that the "double eleven" shopping festival may become a key node to boost consumption. in the fourth quarter, online retail sales will accelerate to 8% year-on-year, 1 percentage point higher than previously expected, mainly due to the government's trade-in plan and consumer spending. vouchers and other policies to stimulate consumption.

goldman sachs raised the target price of alibaba's hong kong stocks from hk$105 to hk$131 and the target price of us stocks from us$108 to us$134; raised the target price of pinduoduo's us stocks from us$165 to us$169; and raised the target price of jd.com's hong kong stocks from hk$157. to hk$178, and the target price of us stocks was raised from us$40 to us$45. goldman sachs has a "buy" rating on the above stocks. goldman sachs pointed out that cooperation between e-commerce platforms, such as taobao and tmall incorporating jd logistics into its logistics provider and opening alipay in jd mall, may bring new growth drivers.

goldman sachs also raised the target price of tencent's hong kong stock from hk$464 to hk$521. it expects tencent's game revenue to accelerate growth, and its advertising and financial technology businesses also have potential. at the same time, it raised the target price of meituan's hong kong stock from hk$157 to hk$194, saying that although the valuation the value is higher than the industry average, but meituan has a strong market position in food delivery and in-store services.

in addition, peter oppenheimer, chief global equity strategist at goldman sachs, predicts that u.s. stocks look expensive and further gains in the future will be moderate. compared with u.s. stocks, oppenheimer is more optimistic about the valuation expansion of european and chinese stocks, believing that valuation expansion is more likely to occur in the stock markets in these two places.