Chinese stocks have underperformed in the new year, with the MSCI China Index rising only 0.8 per cent, compared to the MSCI All World Index’s 2.8 per cent gain. Some fund managers, however, remain optimistic, citing attractive valuations and growth potential in specific sectors as Chinese New Year festivities commence.
Joseph Lai, chief investment officer at Ox Capital, is bullish on insurance giant Ping An, which has 240 million retail customers. Ping An is attractively valued at seven times earnings, according to Lai. He believes the market underappreciates its growth outlook, noting the growing need for financial advice. Aberdeen Investments’ Nicholas Yeo favours Naura, China’s largest semiconductor equipment manufacturer, as well as AI chip designer Cambricon Technologies and Yantai China Pet Foods.
Minotaur Capital’s Thomas Rice has picked electronics company Xiaomi, which expanded into the electric vehicle market in 2024. He also likes WH Group, which is the world’s largest pork processor, owning Smithfield Foods in the United States and the Shuanghui-branded meats business in China. Rice notes that WH Group’s US pork division has gone from loss-making to profitable, while falling hog prices in China have benefited processing margins.
The recent pullback in Chinese equities in the second half of 2025 has created a supportive backdrop for stock picking, according to Lai. Fund managers are focusing on companies with strong fundamentals and growth prospects, despite the overall market’s slow start to the year.
