tl;dr
Goldman Sachs is bullish on ten China-based companies, dubbed the "Prominent 10," which they see as China's counterpart to the US "Magnificent 7." These companies, including Tencent, Alibaba, Xiaomi, BYD, Meituan, NetEase, Midea, Hengrui, Trip.com, and ANTA, represent AI/Tech development, self-suffi...
Goldman Sachs has identified ten China-based companies as the "Prominent 10," which they believe will parallel the US "Magnificent 7" tech giants in AI, technology development, and growth potential. These companies include Tencent, Alibaba, Xiaomi, BYD, Meituan, NetEase, Midea, Hengrui, Trip.com, and ANTA.
The bank forecasts a 13% earnings boost annually over the next two years for these firms, driven by favorable regulations, significant investments in artificial intelligence, and a supportive regulatory environment. Added government measures aimed at stimulating private sector growth and easing mergers and acquisitions are expected to further enhance their expansion prospects.
Goldman Sachs highlights that these companies embody key themes such as AI and tech development, self-sufficiency, global expansion, diversified services, and improved shareholder returns. Their bullish outlook also factors in China’s market segmentation and attractive valuations, which present opportunities for investors.
The list reflects a broad cross-section of industries, including Tencent in gaming and multimedia, Alibaba in e-commerce, Xiaomi in smartphones, BYD in electric vehicles, Meituan in shopping platforms, NetEase in online gaming, Midea in home appliances, Hengrui in pharmaceuticals, Trip.com in online travel, and ANTA in sports equipment.
This strategic positioning aligns with China's increasing support for its private economy, as recent regulations aim to revitalize investment appetite among publicly owned enterprises. Goldman Sachs sees these developments as catalysts for both organic growth and acquisitive expansion, setting the stage for these companies to become major global players akin to the US tech titans.