HSBC-China Equity Strategy-Signs of life-106175215

26January2024EquityResearchReportChinaEquityStrategyEquityStrategyChinaSignsoflifeAfterapoorstart,weseesomepositivesemergingintermsStevenSun,CFA(Reg.No.S1700517110003)ofliquidity,policy,andvaluationsHeadofResearch,HSBCQianhaiSecuritiesLimitedHSBCQianhaiSecuritiesLimitedValuetopersistintheneartermbutarotationtogrowthisstevensun@hsbcqh.com.cnlikelytobethebiggertradethisyear+8675588983158Asconsensusearningswerecutby4-5%,wecutourend-JeffreyXie(Reg.No.S1700523100002)2024eindextargetsby6-13%,butthereisstill10-19%upsideAnalyst,ChinaEquityStrategyResearchHSBCQianhaiSecuritiesLimitedPositivesafterapoorstart.Themarketslumpatthestartoftheyeartookusbyjeffrey.p.xie@hsbcqh.com.cnsurpriseandweacknowledgethatinvestorsarestillconcernedaboutdeflation,+861057952361consumptiondowngradesandweakdemand,propertymarketstruggles,andliquidityproblems(seeChinaEquityStrategy:2024outlookrevisited:ChallengespersistnearNealChen,PhD(Reg.No.S1700122120001)term,5January2024).However,somepositivesarenowemerging:1)Liquidity:AssociateunprecedentedsharebuybacksandstrongstockETFinflowsinJanuaryareShenzhensupportingmarketliquidity;2)The50bpRRRcut:thiswillinjectRMB1trninlonger-termliquidity;wealsoexpectaratecutin2H24(seeChinaeasing:Macro&FX:Employedbyanon-USaffiliateofHSBCSecurities(USA)Inc.andnotKickingofftheyearwithalargeRRRcut,JingLiu,24Janu...