--- title: "The mainland stock market still has considerable upside potential. JP Morgan's Zhang Xiaoning: The CSI 300 index is expected to reach 5,200 points by the end of the year" type: "News" locale: "en" url: "https://longbridge.com/en/news/287040941.md" description: "J.P. Morgan's China equity strategist Zhang Xiaoning stated at the Global China Summit that the liquidity in the mainland stock market is abundant, and it is expected that the CSI 300 index will rise to 5,200 points by the end of the year, potentially reaching 6,000 points in an optimistic scenario. She suggested focusing on areas such as AI, robotics, and energy security. Foreign investment allocation in Chinese stocks has significantly rebounded, with overseas funds recording a net inflow of $13.1 billion this year, indicating a trend of increased foreign allocation to Chinese assets" datetime: "2026-05-20T09:45:21.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/287040941.md) - [en](https://longbridge.com/en/news/287040941.md) - [zh-HK](https://longbridge.com/zh-HK/news/287040941.md) --- # The mainland stock market still has considerable upside potential. JP Morgan's Zhang Xiaoning: The CSI 300 index is expected to reach 5,200 points by the end of the year \[Point News Report\] Zhang Xiaoning, a China equity strategist at JP Morgan, stated today (20th) at the JP Morgan Global China Summit that the current market liquidity remains ample, combined with the positive resonance of listed companies' performance, "from the perspective of the overall market, we maintain a positive and optimistic attitude towards mainland stocks." She believes that under the baseline scenario, the CSI 300 and MSCI China indices may rise to 5200 points and 100, respectively, by the end of the year; in an optimistic scenario, the two indices are expected to reach 6000 points and 120. Strategically, she recommends focusing on three high-quality core growth areas: the AI (artificial intelligence) ecosystem, robotics, and energy security. Zhang Xiaoning admitted that since the beginning of this year, the turnover rate of A-shares and the proportion of financing purchases in total trading volume are both at healthy levels, and the ample liquidity from both domestic and foreign capital provides solid support for the upward movement of the Chinese stock market. Specifically, although the turnover rate on April 7 was at a temporary low, it still exceeded 3%, and this indicator has basically maintained above 5% this month, with a daily high approaching 6%, indicating that market trading remains active. **The trend of foreign capital increasing allocation to China is evident** "In the past two years, foreign capital, especially regional funds, has begun to significantly reduce their underweight position in China." Zhang Xiaoning observed that the underweight of Asian (excluding Japan) regional active funds in Chinese stocks has decreased from -8.3% at the end of February 2024 to the current -1%. Similarly, the underweight of emerging market regional active funds in Chinese stocks has reduced from about -4.5% at the end of January 2024 to the current -2%. In addition, this year, global funds have significantly increased their allocation to Chinese stocks, bringing considerable incremental capital. She continued, according to EPFR data, as of May 15, overseas funds have recorded a net inflow of $13.1 billion this year, significantly outperforming historical levels, indicating a clear trend of foreign capital increasing allocation to Chinese assets. Zhang Xiaoning added that the MSCI China index is objectively a relatively concentrated index, with a high proportion of internet companies, especially those listed overseas. However, benefiting from the global AI industry wave and increasing investor attention to energy security issues, foreign capital's preference for Chinese assets is gradually shifting from internet giants to advanced manufacturing, with even some A-share listed companies being included. Regarding the performance of listed companies, Zhang Xiaoning pointed out that in the first quarter, the CSI 300 achieved a year-on-year EPS (earnings per share) growth of 5%, with a clear momentum for profit growth. More importantly, the market's consensus expectations for EPS over the next 12 months are on a favorable upward trend. This year, whether for the MSCI China EPS expectation of 13.8% or the CSI 300 EPS expectation of about 25%, both indicate investors' optimistic sentiment towards performance. **AI, robotics, and energy themes are promising** When discussing the layout of Chinese stocks, Zhang Xiaoning believes that in an environment of ample market liquidity and overall stable and improving performance, high-quality growth targets are promising, including the AI ecosystem, robotics, and energy security as three core directions. Specifically, IDC predicts that from 2024 to 2029, the global AI industry will have a compound annual growth rate of over 30%, and China's AI industry will also approach a compound annual growth rate of nearly 30%, with the entire AI value chain expected to benefit comprehensively The segmented tracks may welcome a rotation market. As for the robotics sector, it can be divided into two main lines: humanoid robots and industrial robots related to industrial automation. The former will benefit from the phased catalysts brought by the listing plans of some emerging companies, while the latter will gain from China's economic capital expenditure cycle and is expected to initiate a new upward cycle by the end of the year. Zhang Xiaoning also pointed out that in terms of energy security, China's new energy accounts for over 10%. Looking at policy targets, this proportion aims for 30% and 50% in the medium and long term, respectively, indicating ample growth potential. On the other hand, the global high oil price environment will further accelerate the overseas penetration of Chinese new energy vehicles and other categories, thereby creating a resonance of internal and external demand. In terms of allocation, it is recommended to pay attention to new energy vehicles, grid equipment and energy storage equipment in the power equipment sector, as well as upstream materials for new energy. Additionally, investors are advised to continue to overweight the energy sector to hedge against related uncertainties and enhance the robustness of their investment portfolios. 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