Pruksa Iamthongthong

China's equity market is a contrarian opportunity because valuations are attractive relative to the AI-driven rallies in Taiwan and Korea. Despite weak headline macro data, selective sectors like energy security (battery storage) and China localization (AI self-sufficiency supply chain) show bright spots, and consumer spending has become more discerning rather than disappearing. The need for energy security from the Iran war also supports China's supply chain strengths.

China internet names like Tencent and Alibaba are using free cash flow to accelerate AI capex for future growth. While investors are currently punishing them for the short-term earnings impact, the payback periods are attractive as they monetize cloud revenue at higher margins, creating a contrarian buying opportunity.

Investing in high dividend yield stocks in China, such as certain consumer stocks, to balance the portfolio alongside growth investments in the internet sector.

China internet names like Tencent and Alibaba are using free cash flow to accelerate AI capex for future growth. While investors are currently punishing them for the short-term earnings impact, the payback periods are attractive as they monetize cloud revenue at higher margins, creating a contrarian buying opportunity.