"Chinese Stock Market Expected to Rebound After 10 Years... AI Seen as Catalyst for Resolving Undervaluation"

"Liquidity Poised to Drive Chinese Market Recovery"
Jung Euihyun: "AI Industry Expansion Will Resolve Undervaluation"
Household Savings Expected to Flow Into Stocks as Returns on Safe Assets Decline

Jung Euihyun, Head of ETF Management at Mirae Asset Global Investments, stated, "There is a large amount of liquidity waiting to drive the rise of the Chinese stock market," adding, "An investment opportunity has arrived for the first time in 10 years."

On September 3, Mirae Asset Global Investments held a webinar on Chinese stock market investment strategies via YouTube Live.

Jung analyzed, "Household savings in China amount to approximately 160 trillion yuan (3 quadrillion won), which is about 120% of the country's GDP," and explained, "There is a high possibility that funds currently concentrated in bank deposits and bonds will move to the stock market as the market rebounds."

He added, "As the expected return on safe assets declines, investment funds are moving into the stock market," noting, "From the beginning of this year through July, the number of new securities accounts opened in mainland China reached 14.56 million, a 37% increase compared to the same period last year."

He further explained, "The ratio of stock market capitalization to household deposits is near the lows recorded in 2014 and 2024," and said, "After hitting its low in 2014, the Shanghai Composite Index surged the following year."

Expectations are rising that the Chinese stock market could rebound for the first time in a decade. Jung commented, "The spread of artificial intelligence (AI) industries within China will resolve the undervaluation of Chinese stocks," and diagnosed, "Since 2023, the Chinese stock market has been excessively undervalued compared to the U.S. stock market."

As of the end of last month, the 12-month price-to-earnings ratio (PER) of the Hang Seng Tech Index in China stood at 17.1 times, which is lower than the 26.9 times of the U.S. Nasdaq Index.

He explained, "The spread of the AI industry and the increase in self-sufficiency rates will serve as catalysts for resolving the undervaluation of Chinese big tech companies and for the revaluation of the stock market," adding, "Alibaba, for example, has actively adopted AI following DeepSeek and is developing its own AI chips."

Jung also commented, "Industries such as electric vehicles, humanoids, and biotechnology are leading global industries."

To date, Mirae Asset Global Investments has launched a total of 17 TIGER China ETFs. Based on assets under management, the company holds a 75% market share among Chinese stock market ETFs. Major China-related ETFs include TIGER China Semiconductor FACTSET, TIGER China Humanoid Robot, TIGER China Biotech SOLACTIVE, TIGER China Global Leaders TOP3+, and TIGER China Tech TOP10.