非秩序性脱钩风险降低，关注中国资产。

DisorderlyDecouplingRiskReduced, Eyeing China Assets AnalystEva YISAC No. S0570520100005SFC No. AMH263evayi@htsc.com+(852) 3658 6000 Huatai Research 19 May 2025│China (Mainland) Weekly AnalystHE Kang, PhDSAC No. S0570520080004SFC No. BRB318hekang@htsc.com+(86) 21 2897 2202 Our core viewsIn the near term, the rise in US Treasury yields to nearly 4.5%, marginallyemerging signs of pressure in the US economy, and the market’s temporary loss oftrading direction followingmaterialization of thetariffexpectationsmaydisrupttheH-sharemarket, in our view. However, both the tail risks of risk premium andmacroeconomic pressure have eased, narrowing the downside for H-shares. Froman absolute return perspective, a sustained upward trend will require furthercatalysts from domestic demand policies and economic improvement. While somevolatility around tariffs cannot be ruled out, we believe the logic supporting therelative performance of China assets remains intact. Risk of disorderly China-US decoupling reducedAt 3pm on 12 May, China and the US released a joint statement, with the final additionaltariffratesetat34%,belowmarketexpectations.Riskappetitereboundedquickly,pushingthemarket'stradingrangehigher.Duringtheone-quartersuspensionperiodfornewtariffs,front-loadingofexportsandaccelerated overseas expansion may continue to support China’s economic data,prompting a potential upward revision in macroeconomicgrowth expectations.Meanwhile,globalshippingandtradedynamicshaveeasedfrompreviousnear-embargolevels, and demand for major commodities may be bottoming out.Risk-on sentiment couldtemporarilyreturn in global markets, benefiting risk assetperformance.Lookingahead,thequicktransitionfromtariffescalationtode-escalation suggests that whilevolatility may persist, the risk of a return to April’selevated “embargo-like” levels has significantly declined.H-shares’risk premiumand macroeconomic tail risks have moderated, and the trading range hasshifted higher.For a sustained upward trend, further implementation of domesticdemand policies will be key, in our view. Relative performance logic for China assets remains validIn USDterms, major global stock markets such as the US and Europe have already surpassed their levels before 1 April, while Chinese assets—particularlyUS-listed Chinese concept stocksand Hang SengTECH Index—have laggedbehind (from 1 Apr to 16 May:-2.7%froHang Seng TECHvs +5.8%fro S&P 500).The revaluation thesis for China assets was disrupted by the sharp escalation intrade tensions during March and April. At current levels: 1) The overall tariff hike bythe US is largely in line with expectations, while tariffs on China were lower thanexpected, creating room for catch-up in China assets.2) During the recent USDweakening trend, the RMB did not appreciatenotablyagainstUSD, leaving roomforRMBassetrevaluationamidimprovinggrowthexpectations.Weremainconstructive on the relative performance of HK-sharesover the mediumterm, supported by ongoing de-dollarization and global asset reallocationtrends. Southboundfundsturned to outflows; passive foreign inflowsroseAs of14 May (Wednesday), EPFR data showed a net inflow of USD900mn into overseas-listed Chinese stocks (vs USD250mn the prior week). Within that, activeforeign outflows expanded modestly to USD330mn, while passive foreign inflowsrose to USD1.23bn. On southboundcapital, net outflows averaged RMB1.60bnper day last week, totaling c. RMB8bn (vs a net inflow of RMB1.70bn per day andc.RMB6.78bnintotal the weekbefore). Among the most actively traded names,China Construction Bank, China Mobile, and CNOOC led the net inflows. Shortselling accounted for 10.5% of Hang Seng Index turnover over the past week,down 0.2pp from the prior week. In terms of industrial capital, H-share weeklybuybacks reachedc.HKD2.24bn last week, unchanged from the previous week. H-shares may continue tooffer relative returns Looking ahead,lower tariffs on Chinathan market expectationscould easeexport chain pressures and lift growth expectations. Given that the RMB hasnot appreciated meaningfully against other currencies during past USDweakness cycles, both the currency and RMB-denominated assets may seecatch-up gains, in our view.Historically, RMB strength has shown a strongcorrelationwithH-shareperformance.A strongerRMBcouldsimultaneouslyimprove Hong Kong’s terms of trade and boost theattractiveness of RMB assets.We continue to see relative return potential in Hong Kong stocks vs global peers.In terms of allocation, we recommend: 1) pan-consumption names with policystimulus expectations, particularly those benefiting from both AI application rolloutsand improving domestic demand; 2) H-share hard tech names with stable 1Q25earnings, upgraded earnings forecasts, strong self-sufficiencypositioning, andpolicy support; 3)high-dividend names can still serve as a base allocation, with afocus ontelecommunicationnames supported byproactiveAI-related themes andfinancials benefiting from RMB asset revaluat