Singapore Bank: Maintains "Overweight" rating on Chinese stock market, Hang Seng Index target price at 25900 points.

Singapore Bank's China stock strategist Huo Huimin stated that the overall economic targets of the two sessions are roughly in line with expectations. The policy focus is clearly more on supporting economic growth, with this year's work priorities including stimulating consumption, supporting technological innovation such as artificial intelligence, deepening supply-side structural reforms, and stabilizing the real estate market. The government's more proactive stance in supporting economic growth is a major positive factor, so the bank maintains its "overweight" rating on the Chinese stock market in the Asia-Pacific region (excluding Japan). Due to recent profit-taking and risk management operations, Chinese stocks are expected to remain volatile and consolidate in the short term. According to the baseline scenario, the Hang Seng Index is expected to reach 25,900 points. Huo Huimin believes that the emphasis on strengthening the platform economy mentioned by the leadership should help the short-term performance of offshore Chinese stocks, especially since internet and platform companies account for about one-third of the MSCI China Index. This policy direction aligns with one of the bank's three major investment themes for the Chinese stock market, which is investing in internet and platform companies. These companies can benefit directly from domestic demand recovery and also from the industrial wave accelerated by the application of artificial intelligence. The bank reiterates its barbell strategy, focusing on defensive high dividend stocks that are likely to benefit from potential inflows of incremental capital, while also positioning in sectors benefiting from policies and internet and platform companies to seize potential upside opportunities. However, external risks persist, including the potential impact of escalating trade disputes and geopolitical tensions. Furthermore, considering the relatively lagging performance of the A-share market so far this year (lack of platform economy component stocks), it is expected that the onshore market may see a rally. It is worth noting that the Shanghai and Shenzhen stock markets have a high allocation in the industrial and information technology sectors, which will also benefit from the development of artificial intelligence and the structural opportunities brought by the upgrade of high-end manufacturing.