Goldman Sachs released a report updating its Asia Pacific Conviction List for May. Some of the Greater China "Conviction List Buys" covered by the broker are listed below:

Stock｜Target Price
CHINA RES BEER (00291.HK)  +0.350 (+1.266%)    Short selling $26.84M; Ratio 6.524%   ｜HK$51
SHENZHOU INTL (02313.HK)  +1.050 (+1.989%)    Short selling $33.98M; Ratio 21.059%   ｜HK$98
AIA (01299.HK)  +0.300 (+0.540%)    Short selling $84.26M; Ratio 13.814%   ｜HK$98
KUAISHOU-W (01024.HK)  +1.700 (+3.370%)    Short selling $67.59M; Ratio 7.081%   ｜HK$75
TSMC (2330.TW)｜TWD975
H World Group (HTHT.US)      ｜US$52

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Goldman mentioned that China's new "9 Measures" policy opinions were introduced last month, aiming to outline a potential policy-driven upturn in the stock market by improving shareholder returns, corporate governance standards and institutional investor ownership. The broker analysed that if the valuation gap between A-shares and their international peers is narrowed on those 3 major fronts, A-shares could rise by as much as 20%. In a "blue-sky" (bullish) scenario, A-shares could potentially hike 40% if they catch up with international peer valuations.

The broker was strategically positive on A-shares but believed offshore stocks may perform better in the upcoming 3 months, especially as international investors' risk appetite was still recovering. The broker believed consumer technology and service-related sectors could outperform, and favoured quality large-cap stocks while taking into account the cash return factor.

Goldman also noted the increasingly positive attitude of mainland regulators towards the platform economy, and has identified four key trends from recent visits to the mainland. For e-commerce and online advertising, 2Q24 would face a higher base. Shareholder return policy was at the centre of valuation support. Meanwhile, global peers were tightening regulations on personal data, e-commerce import duties and tariffs amid geopolitical tensions, reducing investors' short-term risk appetite and depressing valuations.

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In addition, dotcom leaders were consolidating their businesses with core segments. For example, BABA-SW (09988.HK)  +3.700 (+3.251%)    Short selling $577.74M; Ratio 10.388%   (BABA.US)      regained growth momentum in GMV, MEITUAN-W (03690.HK)  +2.000 (+1.575%)    Short selling $653.26M; Ratio 14.706%   worked to stabilise its local services, while TENCENT (00700.HK)  +12.600 (+2.675%)    Short selling $782.58M; Ratio 9.328%   is expected to resume growth in domestic game revenues from 2Q onwards, thanks to monetisations and new game launches.

Chinese stocks mentioned by the broker with Buy ratings include Full Truck Alliance (YMM.US)      , BOSS ZHIPIN-W (02076.HK)  +1.000 (+1.805%)   (BZ.US)      , TME-SW (01698.HK)  +1.100 (+2.136%)    Short selling $3.25M; Ratio 18.518%   (TME.US)      , NEW ORIENTAL-S (09901.HK)  +0.650 (+1.803%)    Short selling $24.39M; Ratio 15.849%   (EDU.US)      , and TAL Education (TAL.US)      . NTES-S (09999.HK)  +5.500 (+3.408%)    Short selling $147.89M; Ratio 27.777%   (NTES.US)      were preferred over smaller peers in the gaming sector. For e-commerce advertising, the broker preferred KUAISHOU (remained Conviction Buy) and BABA.

(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2025-04-25 12:25.) (Real-time Streaming US Stocks Quote; Except All OTC quotes are at least 15 minutes delayed.)

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