Analysts who were once bearish on Chinese technology stocks have now turned bullish.

Recently, JPMorgan's Asian joint head of TMT industry research, Yao Cheng, stated in an interview that due to improvements in cost structure and reduced competition, "we still expect technology stock prices in China to rise by about 20% to 25%."

Representatives of the "Air Force" from two years ago have turned bullish?

Two years ago, Yao Cheng downgraded the ratings of 28 Chinese technology companies including Tencent and Alibaba, claiming that the Chinese technology industry was "uninvestable". Although he upgraded some of the stocks' ratings just two months later, the term "Uninvestable" also made him one of the leading bearish figures in Chinese technology stocks.

But now, Yao Cheng's attitude has clearly changed significantly.

In April of this year, Yao Cheng predicted in a report that Chinese technology stocks had bottomed out. Recently, technology giants such as Tencent have indeed led the Hang Seng Tech Index to rebound.

Yao Cheng's change in attitude toward China's technology industry shows that some former skeptics are returning to Chinese technology stocks.

Key Focus: China's Macro-Economy

"The top-down view is that if China's macro-economy recovers, e-commerce stocks will benefit from cyclical consumer recovery," Yao Cheng said in an interview last week. "The theme this time is China's macro stability."

Investors have been closely watching China's released data, including consumer growth, inflation, and real estate market developments, to find clues about the strength of China's economic recovery.

Yao Cheng said that recent macro-indicator data has "shown early signs of stabilization," which is the main driving force for the rise in Chinese technology stocks this year and will be a key factor in future stock price trends.

According to the latest economic data released this week, China's total retail sales of consumer goods in May reached 3.9211 trillion yuan, a year-on-year increase of 3.7%, an increase of 1.4 percentage points from the previous month, and a recent high. Liu Aihua, spokesperson for the National Bureau of Statistics, chief economist and director of the Comprehensive Statistics Department of the National Bureau of Statistics, said that in May, the market sales accelerated under the comprehensive effect of the May Day holiday, the "6·18" online shopping promotion, and the replacement policy for consumer goods.

In the first five months of this year, live streaming with sales and instant retail continued to grow rapidly, driving the continued expansion of the online consumption market scale. From January to May, the online retail sales of physical goods in China increased by 11.5% year-on-year, an increase of 0.4 percentage points from January to April, accounting for 24.7% of the total retail sales of consumer goods.

Yao Cheng said that if the industry can achieve profitability growth during the development period, in the long run, people should reward companies that have sustainable profitability.

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