Daily Brief Thematic (Sector/Industry): China Strategy: Interesting Stock Picks for 2H25 and more

In today’s briefing:

China Strategy: Interesting Stock Picks for 2H25
Ohayo Japan | US Stocks Hit Fresh Records as Fed Rate Cut Bets Intensify
Chartered Insights : Optimism Rebounds in Small and Mid-Cap Stocks, But Fundamentals Lag Behind

China Strategy: Interesting Stock Picks for 2H25

While 1H25 results are upcoming, the market’s focus will start to move to the 2H25 earnings. There are five stocks whose earnings momentum will accelerate HoH.
Sany Heavy Equipment (631 HK), Shanghai Electric Group Company (2727 HK), and Shenzhen International (152 HK) are having the best YTD performance. Still, there is more upside.
China Tourism Group Duty Free (1880 HK) and CIMC Enric Holdings (3899 HK) are the laggards YTD, but a stronger earnings outlook should drive a pick-up in 2H25.

US stocks advanced with the S&P 500 and Nasdaq achieving consecutive record highs as investors increasingly bet on Federal Reserve rate cuts following benign inflation data
Treasury Secretary Scott Bessent reinforced dovish sentiment by calling for 150-175 basis points of cuts and suggesting a potential 50 basis point reduction in September
CoreWeave (-21%) tumbled despite beating revenue estimates as operating income guidance disappointed and debt costs mounted

A recent rebound in the SMIDcap index has narrowed its performance gap with Largecaps, driven by renewed investor optimism and liquidity, despite continued weakness in underlying earnings.
The market is showing signs of overheating, with valuations (PEG ratio) reaching historically high levels, fueled by sentiment rather than fundamental earnings growth.
The surge in equity supply is dominated by insider selling rather than growth-driven capital raises, suggesting a cautious market environment where long-term growth prospects may be limited.

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