CICC Research's Liu on China Equities

The video discusses the current state of inflation and economic recovery, highlighting that inflation remains low, particularly in China, and that consumption is driving the recovery. The market outlook for the second quarter is positive, with a focus on consumption and attractive valuations in Chinese markets. Investment strategies are advised to focus on volatility and certainty, with hedge funds being more active. The earnings season shows potential for growth, with expectations of sequential improvements throughout the year.

What is the current state of inflation according to the latest data?

• Inflation is high, especially the CPI.

• Inflation is low, particularly the CPI.

• Inflation is stable with no changes.

• Inflation is unpredictable and volatile.

What is the main driver of the economic recovery in this cycle?

• Consumption

• Government spending

• Exports

• Manufacturing

What is the outlook for the second quarter of the market?

• The market is expected to decline.

• Consumption will be the main driver.

• The market will remain stagnant.

• Manufacturing will lead the recovery.

How has the sentiment of foreign funds towards China changed?

• It has returned to pre-pandemic levels.

• It remains unchanged.

• It has improved but not to pre-pandemic levels.

• It has worsened significantly.

What investment strategy is recommended in the current market environment?

• Avoid investing in China.

• Use a barbell allocation strategy.

• Invest in index funds only.

• Focus on high-risk stocks.

What was the general outcome of the first quarter earnings season in China?

• Earnings were significantly above expectations.

• Earnings were largely in line with expectations.

• Earnings were unpredictable and varied widely.

• Earnings were significantly below expectations.

What is the market's expectation for the rest of the year following the first quarter?

• Unpredictable market conditions.

• Sequential and year-over-year improvement.

• Stagnation in growth.

• A decline in growth.