China Equity Strategy

J.P. Morgan expects a short-term tactical rotation in China equities during July followed by a resurgence of the AI ecosystem in August. The report highlights potential capital inflows from domestic regulatory shifts and maintains core themes in structural growth.

Key Takeaways

• 1.Tactical rotation may continue in July, with non-AI sectors catching up, but AI ecosystem expected to reassert leadership in August earnings season.
• 2.Regulatory tightening on cross-border equity-related Total Return Swaps and offshore brokers could redirect up to Rmb440-650bn into domestic A-share markets.

Table of Contents

• Key charts in focus
• Flows & Positioning
• A-share sector rotation monitor: high concentration level remains
• Companies Discussed in This Report
• Analyst Certification
• Important Disclosures

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