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<Research>G Sachs Anticipates ST Correction Risk for CN Stocks w/ 3% Potential Upside for H-shrs Over Next 12 Mths, Suggests Accumulating on Dips
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The recent rally is primarily driven by expectations of 'reflation' and the accelerated development of China's AI industry, particularly domestic substitution, Goldman Sachs released a research report saying. A total market capitalization of US$3 trillion has been added in the A-/ H-share markets YTD. Since the end of June, the CSI 300/ 1000 indices have risen by 18% and 23% respectively. Although this bull market is characterized by liquidity-driven valuations, it is similar to other global markets and not unique to China. Goldman Sachs stayed Overweight on A-/ H-shares, and expected an upside of 8%/ 3% each over the next 12 months. The broker also recommended accumulating on dips, and favored themes like AI, anti-involution and shareholder returns. Both H-shares and A-shares have strategic allocation value in regional stock markets, and embraced a buy-on-dip mindset, Goldman Sachs added. The recent sharp rally has increased the risk of profit-taking or short-term correction, with potential triggers including local regulatory pressure from overheating market sentiment, more signs of slowing industry cycle growth and the renewed US-China trade tensions, such as frequent geopolitical and policy agendas overlapping with trade barriers in 4Q25. AASTOCKS Financial News Website: www.aastocks.com |
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