Guotai Haitong Asset Management says the CSI TMT index is trading near
historical highs and sector-wide downside risk is building, calling for greater
emphasis on risk management. With popular sub-sectors largely priced to
perfection, strategies should be more cautious and rigorously weigh risk/reward,
shifting toward deeply discounted recovery assets and structural opportunities
driven by frontier tech innovation. Following a sharp early rally, market growth
expectations for the AI compute supply chain are largely priced through 2027;
incremental growth beyond that will be highly dependent on realization of AI
commercialization revenues and sustained financing, which increases long-term
uncertainty. Allocate compute exposures more conservatively and avoid chasing
rallies.
