As we step into the new year, the A-share market has been experiencing a notable retracementThis situation has prompted many investors to evaluate potential strategies for the future of the marketRecently, multiple billion-yuan private equity firms held annual strategy meetings to share their forecasts for 2025, and there appears to be a consensus among industry leaders on the burgeoning growth of the consumer and technology sectorsThey suggest that the revival of domestic consumption could trigger a Davis Double Play, while the maturity of artificial intelligence (AI) technology may pave the way for the emergence of new economic sectors.

At a recent video conference held by Renqiao Asset Management, founder and Chief Investment Officer Xia Junjie outlined several investment directions that merit attention in the coming yearsFirst and foremost, he emphasized that the recovery of domestic consumption is set to be a crucial theme moving forward

Although traditional economic drivers such as investments and exports are under considerable pressure, there is significant potential for recovery in the domestic consumption sphereFurthermore, Xia expressed confidence in the Hong Kong stock market's outlook, anticipating continued capital inflow, particularly into stocks that offer high dividend yieldsAdditionally, he cautioned that bond assets are transitioning from a one-sided bull market to a phase of both upward and downward volatilityHence, investors need to be more prudent and avoid blindly pursuing low-yield bond assetsFinally, he noted that while AI applications are expanding, the stock market is experiencing significant discrepancies, indicating a reduction in speculative trading; he highlighted the promising combination of AI with smart driving and healthcare.

Meanwhile, Xing Shi Investment released its investment strategy for the first half of 2025, as Chief Investment Officer Wan Kaihang shared insights on the market's dynamics

He stated that with pressures on exports and a lack of flexibility in investment, consumption will become a vital focal point for investorsAs we look toward the first half of 2025, Wan predicts that the next phase of the market will shift from being driven by liquidity to being fundamentally driven, with domestic consumption poised to experience a Davis Double PlayThe outlook for A-shares remains within a high cost-performance range, which may present attractive opportunities for savvy investors.

In further discussion, Wan highlighted that current liquidity easing at a macro-level has already influenced asset prices across various classes, resulting in notable gains for certain liquidity-sensitive stocks such as thematic, technology, and brokerage stocksAdditionally, he pointed to the favorable supply-demand dynamics and relatively low valuation levels within the domestic consumption sector where trading activity is less crowded

Consequently, these assets stand to benefit from improvements in both innovative fundamentals and the rotation of liquidity.

In a forward-looking mention, Wu Weizhi, Chairman of the veteran private equity firm Zhongou Ruibo, underscored the importance of seizing structural investment opportunities as a burgeoning theme for 2025. He expressed that many traditional growth-oriented sectors have faced challenges in profit growth due to various factors over recent years, leading to a clearer trend where their growth characteristics now resemble cyclical growth attributes.

Against the backdrop of rapid technological advancements, Wu possesses keen insights into sectoral shiftsHe has astutely noticed that as AI technology matures, it gives rise to entirely new industries within the vast landscape of technology

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Emerging fields now bear similarities to the previously highlighted industries of new energy vehicles and photovoltaics.

Take the example of the new energy vehicle industryIt underwent a long phase of technological development and accumulationInitially hampered by challenges like inadequate battery life and insufficient charging infrastructure, the industry later experienced significant breakthroughs in battery technology, vastly extending range capabilities while building a robust charging networkThis marked the transition of the new energy vehicle sector into a phase of massive commercialization, igniting a global movement toward new energy vehicle development and spawning an intricate web of related economic activities involving manufacturing, sales, after-sales service, and component supply

This dynamic has propelled numerous enterprises into growth and fundamentally altered the economic landscape.

The photovoltaic industry has mirrored this trajectoryInitially, photovoltaic technologies faced limitations, including low conversion efficiencies and high costs, which curtailed widespread deploymentHowever, sustained technological innovations improved materials, increased conversion efficiencies, and significantly lowered production costsThis evolution led the photovoltaic sector to a flourishing era, entering large-scale commercialization while playing a pivotal role in energy supply and catalyzing a wide array of upstream and downstream industries, ultimately forming substantial new economic domains.
Today, AI technology is following a similar path

As it overcomes critical technical bottlenecks and approaches maturity, it begins to demonstrate vast applications in varied industriesThe creation of new sectors and avenues may replicate the past successes of the new energy and photovoltaic industries, potentially serving as a robust engine for economic growth.

Wu Weizhi went further to identify numerous noteworthy structural opportunities within the investment landscape leading up to 2025. On one hand, he pointed to a group of high-dividend companies that, despite having endured market fluctuations previously, have exhibited a degree of recoveryFrom a valuation perspective, these companies currently remain undervalued, representing an attractive investment propositionOn the other hand, the new economy growth stocks are emerging as another pivotal area of focus