JPMorgan: Overseas investors are extremely bullish on Chinese stocks, with the internet sector serving as a pillar of confidence.

Following Citigroup's statement that overseas investors are paying attention to the Chinese stock market, JPMorgan's latest report also mentioned that it met with global and emerging market stock investors in North America in the past week, and the investors were more optimistic about the Chinese market than ever before in the past four years, and international investors are also enthusiastic about the current rebound.

The bank said that the success of DeepSeek convinced global investors that China's artificial intelligence (AI), and believed that the internet sector is investable and less affected by macro volatility. Most investors agree that Chinese internet and information technology stocks, leading new energy vehicle shares, and AI shares are investable.

Moreover, the bank analyzed the PE gap between Chinese and US individual stocks in the next 12 months, and pointed out that the PE gap between Tencent (00700) and Meta (META.US) and Xiaomi (01810) and Apple (AAPL.US) is narrowing or even reversing, while the gap between Alibaba (09988) and Amazon (AMZN.US) is still large.

JPMorgan also mentioned that investors who specialize in technology stocks often discuss global AI capital expenditure and returns, and Tencent's fourth-quarter 2024 results announced on Wednesday (19th) will be considered crucial for assessing incremental AI capital expenditure and future monetization prospects.

The bank also pointed out that emerging market funds maintain a "market" or "overweight" rating for the Chinese market, while global or international funds are mostly "underweight" in Chinese stocks. The bank's preferred stocks in the real estate, consumer, and financial sectors are Anta (02020), China Resources Everbright (01209), and Huatai Securities (06886).