Daiwa: Reiterates Optimistic Outlook on Chinese Market, Includes LAOPU GOLD and KINGSOFT CLOUD in Preferred List

Daiwa published a report stating that after organizing the GDP targets of various provinces in China, it estimated that the "implied" national GDP target for 2026 is 5%. Based on past experience, this suggests that the more conservative "official" target will fall within the range of 4.5%-4.7%. Against this backdrop, if the national two sessions held on March 5 ultimately set the GDP target for 2026 at around 5%, it may indicate that stronger economic stimulus measures are about to be introduced. The fiscal stimulus targets are expected to be fixed asset investment, consumption, and real estate.

Daiwa pointed out that due to recent market fluctuations, it reaffirms its optimistic outlook for the Chinese stock market in the first half of 2026, with the stimulus policy season likely continuing until April. Although it still believes that the likelihood of large-scale stimulus policies is low, the introduction of gradual stimulus measures and strong policy guarantees can boost investment sentiment in the short term, benefiting its preferred stocks including China Resources Land (01109.HK) and Midea (000333.SZ).

Due to strong downstream demand driving price increase expectations, the firm has included Laopu Gold (06181.HK) and Kingsoft Cloud (03896.HK) in its preferred list, replacing the previous favorites Shenzhou International (02313.HK) and Trip.com (09961.HK)