The program 'Zheng Zheng Jing Jing' reports that Goldman Sachs has updated its 'China Preferred AI Portfolio' list, covering five levels: power, semiconductors, infrastructure, models, and applications.
On October 13, Goldman Sachs published a research report stating that since the beginning of 2025, following the DeepSeek moment, Chinese AI-related listed companies have created nearly $5 trillion in market capitalization through rising stock prices and IPOs. AI stocks now account for 42% of the total market cap and 57% of trading volume in A-shares and H-shares, significantly reshaping the landscape of China's stock market.
*AI Ecosystem: Intense US-China Competition*
The narrative of a global AI duopoly is gaining investor attention—consisting of two dominant, independent AI ecosystems: one led by the United States and its major trading partners, and the other led by China. China has long been a key exporting nation in the global AI supply chain, holding over 50% global market share in rare earth production/refining, power equipment, PCBs (printed circuit boards), optical modules, and mature-process semiconductors.
With the advancement of domestic AI technologies, China is gradually building an internal circular AI value chain encompassing advanced semiconductors, open-source large language models, and application layers, positioning itself to compete with the US-centered AI ecosystem.
Goldman Sachs' recommended portfolio includes 50 stocks covering both A-shares and H-shares.
Hong Kong stocks fell initially but rebounded yesterday (13th). Huatai Securities noted that the pre-holiday expectation of a short-term rebound is beginning to materialize, with three marginal changes worth noting:
First, the pressure from interest rates has marginally eased, but conditions for a sustained decline have not yet emerged; higher for longer remains the base case;
Second, southbound funds returned as expected; on the first day of resumption on October 8, net buying reached approximately 6.5 billion yuan, with increased buying on declines. Short-selling ratios dropped from above 20%, while active foreign capital outflows, though continuing for the fifth consecutive week, narrowed significantly, alleviating extreme selling pressure;
Third, panic pricing in derivatives was cleared in a single day. On October 8, market makers' Gamma turned negative, amplifying the decline, while position PCR surged to an extreme high of 2.08. On October 9, market makers' Gamma rebounded to positive 590 million yuan, and PCR sharply dropped to 0.86. Protective positions were largely liquidated, long exposure rebuilt, and both implied skew and term structure recovered—typical of a reversal structure following panic clearance.
A short-term rebound under extreme pressure is a reasonable move, but medium-term liquidity and fundamental constraints remain unresolved, and the year-end peak of share unlocks looms ahead. It is advised to focus on structural positioning rather than chasing beta. In terms of allocation, dividend stocks should remain core holdings; leading innovative pharmaceutical and CXO (pharmaceutical outsourcing services) stocks can be held, with emphasis on stock selection and profit-taking. Necessities such as beverages and dairy lack catalysts—patience is advised.
Yinhe Securities believes expectations for reforms in the Hang Seng Tech Index are likely to continue gaining traction. The AI industry chain's robustness is supported by actual orders, compounded by the return of southbound capital after the holiday, maintaining a favorable window for structural positioning. However, upcoming US CPI/PPI data and high US Treasury yields suppressing valuations call for maintaining flexible positioning.
*Focus on Three Key Sectors*
Recommended sectors: (1) Technology. Strong AI demand is driving both volume and price increases in PCBs, with ongoing shortages and price hikes in upstream copper-clad laminates. NVIDIA (US.NVDA)'s new-generation AI systems are already in production use, with industry chain vitality supported by tangible orders. Focus on optical modules/fibers, PCBs, high-speed connectivity, AI servers, domestic AI chips and foundry services, power infrastructure, and progress in major model developers. (2) Innovative pharmaceuticals and CXO. The October ESMO annual meeting (European Society for Medical Oncology, 23rd to 27th) provides a clear catalyst, with core data from multiple Chinese innovative drug companies to be disclosed. (3) High-dividend, low-volatility stocks. Banks, utilities, telecommunications, and energy serve as defensive core holdings to hedge against interest rate risks from potential US inflation data surprises.
*Mysterious Funds Re-enter the Market*
The afternoon rebound in both A-shares and H-shares yesterday was again due to mysterious funds entering the market—more on that later. Senior Investor, Shek King-chuen
(Investing involves risk; risk tolerance varies among investors. Independent judgment is essential. The author may trade based on market conditions.)
*Articles published in Economic Times, whether signed or unsigned, represent the authors' personal opinions and do not reflect the stance of Economic Times. Economic Times serves as a platform for free expression.
On October 13, Goldman Sachs published a research report stating that since the beginning of 2025, following the DeepSeek moment, Chinese AI-related listed companies have created nearly $5 trillion in market capitalization through rising stock prices and IPOs. AI stocks now account for 42% of the total market cap and 57% of trading volume in A-shares and H-shares, significantly reshaping the landscape of China's stock market.
*AI Ecosystem: Intense US-China Competition*
The narrative of a global AI duopoly is gaining investor attention—consisting of two dominant, independent AI ecosystems: one led by the United States and its major trading partners, and the other led by China. China has long been a key exporting nation in the global AI supply chain, holding over 50% global market share in rare earth production/refining, power equipment, PCBs (printed circuit boards), optical modules, and mature-process semiconductors.
With the advancement of domestic AI technologies, China is gradually building an internal circular AI value chain encompassing advanced semiconductors, open-source large language models, and application layers, positioning itself to compete with the US-centered AI ecosystem.
Goldman Sachs' recommended portfolio includes 50 stocks covering both A-shares and H-shares.
Hong Kong stocks fell initially but rebounded yesterday (13th). Huatai Securities noted that the pre-holiday expectation of a short-term rebound is beginning to materialize, with three marginal changes worth noting:
First, the pressure from interest rates has marginally eased, but conditions for a sustained decline have not yet emerged; higher for longer remains the base case;
Second, southbound funds returned as expected; on the first day of resumption on October 8, net buying reached approximately 6.5 billion yuan, with increased buying on declines. Short-selling ratios dropped from above 20%, while active foreign capital outflows, though continuing for the fifth consecutive week, narrowed significantly, alleviating extreme selling pressure;
Third, panic pricing in derivatives was cleared in a single day. On October 8, market makers' Gamma turned negative, amplifying the decline, while position PCR surged to an extreme high of 2.08. On October 9, market makers' Gamma rebounded to positive 590 million yuan, and PCR sharply dropped to 0.86. Protective positions were largely liquidated, long exposure rebuilt, and both implied skew and term structure recovered—typical of a reversal structure following panic clearance.
A short-term rebound under extreme pressure is a reasonable move, but medium-term liquidity and fundamental constraints remain unresolved, and the year-end peak of share unlocks looms ahead. It is advised to focus on structural positioning rather than chasing beta. In terms of allocation, dividend stocks should remain core holdings; leading innovative pharmaceutical and CXO (pharmaceutical outsourcing services) stocks can be held, with emphasis on stock selection and profit-taking. Necessities such as beverages and dairy lack catalysts—patience is advised.
Yinhe Securities believes expectations for reforms in the Hang Seng Tech Index are likely to continue gaining traction. The AI industry chain's robustness is supported by actual orders, compounded by the return of southbound capital after the holiday, maintaining a favorable window for structural positioning. However, upcoming US CPI/PPI data and high US Treasury yields suppressing valuations call for maintaining flexible positioning.
*Focus on Three Key Sectors*
Recommended sectors: (1) Technology. Strong AI demand is driving both volume and price increases in PCBs, with ongoing shortages and price hikes in upstream copper-clad laminates. NVIDIA (US.NVDA)'s new-generation AI systems are already in production use, with industry chain vitality supported by tangible orders. Focus on optical modules/fibers, PCBs, high-speed connectivity, AI servers, domestic AI chips and foundry services, power infrastructure, and progress in major model developers. (2) Innovative pharmaceuticals and CXO. The October ESMO annual meeting (European Society for Medical Oncology, 23rd to 27th) provides a clear catalyst, with core data from multiple Chinese innovative drug companies to be disclosed. (3) High-dividend, low-volatility stocks. Banks, utilities, telecommunications, and energy serve as defensive core holdings to hedge against interest rate risks from potential US inflation data surprises.
*Mysterious Funds Re-enter the Market*
The afternoon rebound in both A-shares and H-shares yesterday was again due to mysterious funds entering the market—more on that later. Senior Investor, Shek King-chuen
(Investing involves risk; risk tolerance varies among investors. Independent judgment is essential. The author may trade based on market conditions.)
*Articles published in Economic Times, whether signed or unsigned, represent the authors' personal opinions and do not reflect the stance of Economic Times. Economic Times serves as a platform for free expression.
