According to Zhito Finance APP, on Thursday, the research report "China Stock Strategy" led by Deutsche Bank Analyst Peter Milliken, known as the "strongest bull" in the Chinese market, was released. Milliken has remained Bullish on the Chinese stock market, emphasizing "reversal trades" almost every few months since the market downturn in 2021.

The latest research report, centered on the Concept "China's Sputnik Moment", argues that China's technological innovation has triggered a "cognitive leap" globally. In 2024, China's dominant position in global manufacturing will be further consolidated, successfully surpassing Germany to become the largest auto exporter in the world, and launching the world's first sixth-generation fighter jet and low-cost AI system DeepSeek. American Silicon Valley investor Marc Andreessen even referred to the launch of DeepSeek as the "Sputnik Moment for AI", symbolizing that China's technological rise can no longer be ignored. (The Soviet Union successfully launched the world's first artificial satellite, Sputnik 1, in 1957, and hence the "Sputnik Moment" became a symbol of a significant shift in the global competitive landscape.)

The report points out that 2025 will be a year for global investors to reassess the Chinese market. As Chinese companies gain leading positions in various manufacturing and service industries, the market is expected to revalue the "China discount" and drive the stock markets in China and Hong Kong into a long-term bull market.

The report indicates that Chinese companies have upgraded from "low-cost manufacturing" to "high value-added innovation" in multiple industries. From textiles and Steel to electronics, and the rapidly emerging New energy Fund (EV), nuclear energy, high-speed railroads, and AI, Chinese companies demonstrate strong global competitiveness.

The report emphasizes that the competitive advantage of Chinese companies is not only reflected in manufacturing but is also gradually expanding into high value-added services. In 2024, the export volume of Chinese goods will be twice that of the USA, accounting for 30% of global manufacturing added value. In the service sector, China's market share is also rapidly increasing, especially in fields such as finance, Software, and AI.

Deutsche Bank believes that global investors are still severely underweighting Chinese assets, much like the underestimate of the traditional energy industry back then, but the market will gradually become aware of this mistake. Despite concerns about economic slowdown, China’s economic growth rate remains more than twice that of most Developed Markets. Considering the dominant position of Chinese companies in the global market, the proportion of its stock market's Market Cap to the global market is expected to significantly increase.

The report mentions that the current valuation of China's Capital Markets remains at a historical low. Compared to the USA's Nasdaq, although the CSI 300 Index has many globally leading companies, its PB is only a quarter of that of the Nasdaq, and its PE is still at a historical low. Meanwhile, Chinese stocks listed in Hong Kong are generally about 40% cheaper than A-shares, further providing value investment opportunities.

Deutsche Bank points out that despite the ongoing adjustments in China's economic structure, government policies are increasingly favorable towards Capital Markets. The Chinese financial system may accelerate liberalization in the future, promoting Capital Markets development, which will further boost stock market performance. Since 2024, China has gradually lowered mortgage loan rates, reduced excess capacity, and increased support for the Consumer and Technology sectors.

Furthermore, despite the slowdown in China's population growth, its 'automation leadership' and Belt and Road Initiative Concept effectively expand market territory. Reports show that China currently occupies 70% of the global market share in industrial robots, and has entered Emerging Markets such as Central Asia, West Asia, and Africa through the Belt and Road Initiative. In 2024, China's exports to Brazil, the UAE, and Saudi Arabia grew by 23%, 19%, and 18%, respectively, while exports to ASEAN countries increased by 13%. The rise of these markets indicates that the growth potential of the Chinese economy extends far beyond the domestic market.

Deutsche Bank expects that the Chinese stock market will enter a long-term bull market by 2025, with Hong Kong and A-shares becoming the focus of global investors. Especially in the context of uncertainty in Federal Reserve policies, a recession in European and American manufacturing, and a decline in the competitiveness of Western enterprises, global funds may be reallocated to the Chinese market.

The bank emphasizes that there are certain similarities between the rise of the Chinese economy and that of Japan in the 1980s, but the speed of globalization and industrial upgrading in China far exceeds that of Japan. In the next five years, global investors may need to reassess China's growth logic and increase their allocation weight to the Chinese market. The report suggests that investors pay attention to China's New energy Fund, Semiconductors, AI, leading manufacturing enterprises, and high-end service companies with global competitiveness.