HSBC Qianhai Securities Limited Research Hub

HSBC Qianhai Securities Limited maintains a constructive outlook on Chinese equities for the second half of 2026, pivoting from the initial AI-led rally toward a more diversified sectoral strategy. Analysts emphasize that structural earnings recovery and robust domestic liquidity provide a firm foundation for this market breadth, particularly as technology valuations face increased scrutiny. While the firm remains bullish on AI, it advocates for a strategic reallocation into industrials, materials, and high-quality dividend-paying equities to mitigate concentration risk. A central component of this research is a proprietary 5-layer AI framework, which highlights a distinct competitive bifurcation between China and the US. The analysis posits that while the US maintains dominance in chip technology, China derives significant advantages through its superior energy capacity and underlying infrastructure. Ultimately, the research directs investors to balance high-growth potential with stable, value-oriented industrial exposure as the economic recovery matures.