Goldman Sachs supports the Chinese market: With AI, the dividends of Hong Kong stocks are "not stopping" and A shares also have room to catch up!

Goldman Sachs believes that the liquidity support driven by artificial intelligence (AI) and will be a key driving factor, therefore maintaining a positive stance on China's A-shares and H-shares. Analysts expect that H-shares will further benefit from the development of artificial intelligence, and there is also room for A-shares to catch up, which could potentially narrow the performance gap between the two. With increased global funding into the Chinese market, H-shares may still be the preferred choice for investors. However, the short-term upward trend in A-shares may also strengthen. Goldman Sachs predicts that the performance of A-shares will outperform H-shares in the next three months. The premium of A-shares relative to H-shares has narrowed from 34% three months ago to 14%. If it returns to the average level of the past year, A-shares are expected to achieve a gain of about 10%. Investor optimism about the benefits of the AI economy has helped the Hang Seng Technology Index and the MSCI China Index climb steadily in the past month. Previously, Goldman Sachs's Chinese stock research team expected that the widespread adoption of AI over the next ten years is expected to increase overall Chinese stock earnings by 2.5% annually. In addition, given the improvement in growth prospects and the potential confidence boost that may follow, the team also expects to drive up the fair value of Chinese stocks by 15-20%, and may bring in over $200 billion of funds. For these reasons, Goldman Sachs has raised the target points for the MSCI China and Shanghai-Shenzhen 300 indices to 85 points and 4700 points respectively, implying a potential upside of 16% and 19% over the next 12 months. Recently, Morgan Stanley also released a research report stating that the "animal spirit" is returning to the Chinese stock market, but the bank believes it is limited to the technology sector. The bank's strategists abandoned their previous bearish view on the Chinese stock market last week and expect that with the boost from the development of Chinese artificial intelligence, the Chinese stock market will see a more sustainable rise. Morgan Stanley said that last week's private economy symposium focused on technology, and this policy shift reflects a reordering of China's economic development priorities, with the technology sector gradually becoming a new engine driving economic growth.