Morningstar's Chinese real estate stock analyst Zhang Junfei said that domestic housing prices still face challenges, and recent domestic housing stimulus measures are expected to take several months to take effect. The bank prefers state-owned real estate developers such as China Overseas (00688.HK) and China Resources Land (01109).

Zhang Junfei expects that the sales of new houses in 2024 will record a double-digit decline on an annual basis, but considering the loose policies in some regions, coupled with improved buyer sentiment, the prospects for the next few years are expected to improve. In the short term, given the continuous implementation of loose policies, there may be demand changes in the second half of this year. It is expected that due to the pressure of oversupply, the national average price of new houses in 2024 will fall by 3% based on the value of contract sales and current house prices.

Chen Lizhi, director of Asian stock research of Morningstar, believes that the announcement of mid-term performance of Chinese-funded stocks is the reason for the slight volatility of the Chinese stock market from the third quarter to the present. She expects that the sudden announcement of interest rate cuts by the People's Bank of China earlier this week will not stimulate economic activity too much in the short term.

Matt Wacher, Chief Investment Officer of Morningstar's Macroeconomic Outlook and Investment Portfolio Strategy, pointed out that some Chinese-funded technology stocks are undervalued, and the bank's investment portfolio also includes Chinese-funded technology stocks such as Tencent (00700.HK) and Alibaba (09988.HK). Chen Lizhi added that due to geopolitical risks, Chinese-funded stocks will only focus on companies mainly selling in the mainland. She is bullish on baijiu stocks like Moutai (600519.SH) and e-commerce stocks like Tencent, and believes that Tencent is not only benefiting from the latest game version approval, but also exhibiting strong performance in its entire product line.