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2026-09-14 15:10:31 Market focus is shifting from sentiment back to fundamentals, CLSA said in a research report. The broker's "At a Clip" China strategy report revolves around three major themes: AI monetization, China biotech catalysts, and livestock supply discipline. The broker viewed investors should focus on earnings delivery, identifiable catalysts, and companies with cost or execution advantages. On agentic AI, the broker said computing power demand continues to be underpinned by AI infrastructure spending, but the next round of re-rating will depend on commercialization validation beyond coding applications. Semiconductor equipment remains a high-conviction beneficiary sector. Forecasts for the global wafer fab equipment (WFE) market were revised upward, with 2026 and 2027 estimates raised by about 14% and 30% respectively, while the market could further reach around USD200 billion in 2028. In cloud computing, the broker projected the global public cloud market to double to USD2.3 trillion by 2028. The broker believed full-stack AI service providers are best positioned to capture opportunities. BABA-W (09988.HK) is viewed as being in the strongest position in China to benefit from this long-term structural trend, while TENCENT (00700.HK) has advantages in consumer agents and enterprise SaaS through the WeChat ecosystem, world models, and video and gaming data. The broker also noted that earnings results and guidance from NVIDIA (NVDA.US) reinforced visibility for medium-term computing power demand, and foresaw TRIP.COM-S (09961.HK) is more resilient than US-funded OTA operators. In biotech, the broker said fundamentals' explanatory power over sector performance recovered to more than 54%, while business development (BD) activities in 4Q26 and upcoming clinical data releases will serve as near-term catalysts. China-related outbound licensing deals reached about USD99.7 billion in 1H26, reinforcing China's role in global drug innovation. On the clinical front, the World Conference on Lung Cancer (WCLC) and the European Society for Medical Oncology (ESMO) meetings were expected to amplify valuation and partnership momentum. Data updates from China-originated assets such as AKESO (09926.HK) and SKB BIO (06990.HK) are worth monitoring. BEONE MEDICINES (06160.HK), CSPC PHARMA (01093.HK) and HANSOH PHARMA (03692.HK) were also mentioned in relation to licensing or clinical pipelines. Overall, under the three major themes, the market is returning to a stage where earnings realization serves as the basis for pricing. ~ AASTOCKS Financial News Website: www.aastocks.com | |