00:00Joining us here on set to talk us through what happened and the outlook for 2026,
00:04Hao Hong, Managing Partner and CIO of Lotus Asset Management.
00:08Nice to see you and Happy New Year.
00:09Happy New Year to you.
00:11There's been a, not that it's happened only yesterday,
00:13but there's been a change in market leadership in the Chinese markets.
00:17It's onshore that's been taking the helm.
00:19What do you think is going on there?
00:20Yeah, well, I think because last year, in 2025,
00:24Hong Kong has been doing substantially better than Asia.
00:26I think Asia only catch up after November-ish.
00:30And also right now, if you look at the leadership in the market, right,
00:34so on one hand, it's the technology sector that is going on full cylinder.
00:39And then at the same time, I think the industrial metals are also doing very, very well as well.
00:43So I think, you know, many of the industrial names are actually coming back.
00:47It's giving people a sense of, you know, a cyclical upswing,
00:50even though the economic data is not showing it.
00:52But I think in the market, you know, the sentiment is back
00:54and people is, you know, have the money to spend.
00:57And so they're ready to get back to the market.
00:59And do we still need more of the fundamentals to improve for this rally to continue?
01:04I think so.
01:05Well, I think right now, you know, the fundamental is still quite weak, right?
01:09So we have already hit the peak of the cycle in third quarter 2025.
01:14I think people now is looking for policies.
01:18And I think in recent days, you know, there's sort of a policy talks from the top,
01:23basically saying that, you know, we're going to, you know, support the property market at all costs and all that.
01:28So I think people are actually looking forward to the delivery of the policies.
01:32I mean, there are two sides to the policy story.
01:36One is on the macro front.
01:37One is specifically on specific sectors, right?
01:40So whether that's consumption, the extension of subsidies or, you know, calls for financing for tech.
01:46Are there specific industries that stand out to you this year that might provide some alpha?
01:50I think, well, if you look at the five-year plan of, you know, starting this year,
01:55basically, you know, top three sectors is on the list.
01:58The first one is technology.
02:00I think the second one is, you know, build up the complete, comprehensive industrial system.
02:05And then the third one is consumption.
02:07I think people should look for clues, you know, from this five-year plan.
02:11Okay.
02:12In terms of AI, though, I mean, it seems like it's the chip makers that starting the year in a very, very strong way.
02:18Do I continue to focus on the hardware?
02:21I mean, or do I look at for the, everyone's talking about 2026 as the year of adoption.
02:25Everyone else.
02:26Everyone else.
02:27I mean, where should I lean more towards?
02:29Or is it all of the above?
02:30No, I think all of the above.
02:32I think, you know, the advancement of the hardware actually brings forward, you know, the advancement of software as well.
02:37And I think a couple of days ago, DeepSick actually came out with a new paper, you know, showing a new way to train your models.
02:45It's reminences of last year, this time, right?
02:48So it's all more or less the same, you know, DeepSick come up with a new model that is showing huge potential for Chinese techs.
02:55And then everything rallied for three months.
02:57Yeah.
02:57I think, you know, a similar episode is happening right now, right?
03:01So I think DeepSick is making breakthrough.
03:03Many other Chinese AI companies are making breakthrough as well.
03:07For example, Baidu's listing is a semiconductor unit.
03:10I think late last year, Alibaba is claiming that they make a breakthrough on this area and models as well.
03:18So I think, you know, there's just so many things going on.
03:21And also, if you look at the liquidity in the market, it's still positive.
03:25It's still rising.
03:27Therefore, you know, I think it's conducive for risk taking.
03:30So, if you look at the liquidity in the market, it's still rising.
Comments