Goldman Sachs expects Chinese stocks to attract US$200 billion and rise by as much as 19 per cent in the next 12 months thanks to frenzied adoption of DeepSeek and other artificial intelligence (AI) in the country.
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The US investment bank on Monday raised its target for the MSCI China Index of nearly 600 companies to 85 from 75, implying a 16 per cent upside over the next 12 months, and predicted the CSI 300 Index of the largest companies trading in Shanghai and Shenzhen would jump 19 per cent to 4,700 in the same period.
In addition, widespread AI adoption would boost Chinese companies’ earnings per share by up to 2.5 per cent per year over the next decade as the new technologies cut costs, enhance productivity and spawn new revenue streams, Goldman said in a report.
“Improving growth prospects and perhaps a confidence boost could also raise the fair value of China equities by 15 to 20 per cent, and potentially usher in over US$200 billion of portfolio inflows,” said the report, written by Kinger Kau, Timothy Moe, Si Fu and Kevin Wong.
The “Chinese AI story” would boost net buying, helping to reverse “conservative and underweight allocations” to Chinese equities among global asset managers, Goldman said.
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Hitting the index targets would increase market capitalisation by US$3 trillion over the next 12 months, it said.