Morgan Stanley published the China stock market strategy report, downgrading the rating of non-essential consumer goods industry from 'in line with the market' to 'shareholding', and upgrading the rating of the medical care industry from 'shareholding' to 'in line with the market'.

The bank indicated that downgrading the rating of the non-essential consumer goods industry to 'shareholding', the active risk is negative 50 basis points, maintaining this rating for the least short term, based on the lack of details on stimulation for consumption, and uncertainties in the scale, timing, and implementation of mainland fiscal expansion policies. As a result, ANTA Sports (02020.HK) has been removed from the list of focus stocks for China-Hong Kong listed companies. The bank raised the rating of the medical care industry to 'in line with the market', and eliminated the negative 50 basis points active risk, reflecting the bank's addition of China Resources Sanjiu (000999.SZ) to the list of focus stocks for China-Hong Kong listed companies; also including COSCO Ship Engy (01138.HK) in the list.

The bank stated that the situation in the past few weeks shows that the path of currency expansion in China remains bumpy, with short-term fiscal policy likely to remain gradual. It is expected that there will be 2 trillion yuan of debt replacement in the remaining time of this year, and another 2 to 3 trillion yuan of debt replacement next year. At the same time, with the upcoming U.S. election, more noise and potential trade issues, tariffs, and technology restrictions will bring more difficulties to some stocks.

The following table shows Morgan Stanley's latest list of focus stocks for China-Hong Kong listed companies:

Aluminum Corporation of China A shares (601600.SH)

Bank of China (Hong Kong) (00939.HK)

China Resources Sanjiu (000999.SZ) - newly added

China Yangtze Power (600900.SH)

Contemporary Amperex Technology (300750.SZ)

COSCO Ship Engy (01138.HK) <- New addition

GDS Holdings (GDS.US)

Hong Kong Telecommunications (06823.HK)

MTR (00066.HK)

Nari Technology (600406.SH)

PetroChina (00857.HK)

Pop Mart (09992.HK)

Tencent (00700.HK)

Zijin (02899.HK)

ZTO Express (ZTO.US)

Stocks Removed from the List:

Anta Sports Products (02020.HK)

Naura Technology Group (002371.SZ)