Analysts who were once bearish on Chinese technology stocks have now turned bullish.
Recently, Yao Cheng, co head of TMT industry research at JPMorgan Chase Asia, stated in an interview that "considering the improvement of cost structure and the weakening of competition, we still expect the stock price of Chinese technology stocks to rise by about 20% to 25%."
Two years ago, the representative of the "Air Force" changed to bullish?
Two years ago, Yao Cheng once downgraded the ratings of 28 Chinese technology companies, including Tencent and Alibaba, calling the Chinese technology industry "Uninvestable," causing a market uproar. Although he raised the ratings of some of the stocks just two months later, the term "Uninvestable" also made him one of the leading bearish bears on Chinese technology stocks.
But now, Yao Cheng's attitude has clearly changed significantly.
In April this year, Yao Cheng predicted in a report that Chinese technology stocks had bottomed out. Recently, technology giants such as Tencent have indeed led the rebound of the Hang Seng Technology Index.
Yao Cheng's shift in attitude towards the Chinese technology industry highlights that some skeptics of the past are returning to Chinese technology stocks.
Focus: China's Macroeconomy
"The top-down view is that if China's macroeconomic recovery occurs, e-commerce stocks will benefit from the cyclical recovery of consumption," Yao Cheng said in an interview last week. "The theme of this time is China's macroeconomic stability."
Investors have been closely monitoring data released by China, including consumer growth, inflation, and the development of the real estate market, in search of clues about the strength of China's economic recovery.
Yao Cheng stated that the recent macro indicator data has already improved; quot; Showing early signs of stabilization; quot;， This is the main driving force behind the rise of Chinese technology stocks so far this year, and will become a key factor dominating future stock price trends.
According to the latest economic data released this week, the total retail sales of consumer goods in China reached 3921.1 billion yuan in May this year, a year-on-year increase of 3.7%, an increase of 1.4 percentage points from the previous month, and a recent high. Liu Aihua, spokesman of the National Bureau of Statistics, chief economist, and director of the Department of Comprehensive Statistics of the National Economy, said that in May, under the combined effect of the May Day holiday, the "June 18" online shopping promotion in advance, and the consumer goods trade in policy, market sales accelerated.
In the first five months of this year, live streaming sales and instant retail in China continued to maintain rapid growth, driving the continuous expansion of the online consumer market. From January to May, the online retail sales of physical goods in China increased by 11.5% year-on-year, an increase of 0.4 percentage points from January to April, accounting for 24.7% of the total retail sales of consumer goods in society.
When talking about the Chinese technology industry, Yao Cheng said that if the industry can achieve profit growth while still in its development stage, in the long run, people should reward companies with sustainable profitability.