According to Macquarie's China market strategy report, the pause in the US-China trade war has provided an opportunity to reassess investments in China. While the impact of tariffs on the sales of MSCI China Index constituents is limited, themes such as consumption downgrade, corporate innovation, and policy remain attractive.

Macquarie wrote in the report that it would focus on Chinese stocks' EPS stability in 2H25. The first theme centered on the consumption downgrade of Chinese consumers. With the low-price trend persisting despite subsidies shoring up recent retail data, the broker recommended seeking winners in stress-resistant consumer industries, such as MIDEA GROUP (00300.HK)  +0.150 (+0.201%)    Short selling $341.70M; Ratio 35.067%   and POP MART (09992.HK)  -9.000 (-3.620%)    Short selling $1.44B; Ratio 14.727%   .

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The second theme is to pay attention to oil prices and USD fluctuations. Given that geopolitical factors may intensify oil price volatility accompanied by a weaker USD, Macquarie conducted a correlation analysis and found that banks, insurance, and internet companies could be potential hedging options.

The third theme revolved around quality local demand winners, with which Macquarie suggested that investors should avoid stock risks affected by tariff news fluctuations. The broker selected China's quality local demand companies, including CHOW TAI FOOK (01929.HK)  +0.160 (+1.270%)    Short selling $55.28M; Ratio 36.573%   and HAIDILAO (06862.HK)  +0.080 (+0.554%)    Short selling $57.63M; Ratio 25.775%   .

On Macquarie's stable growth/quality + local demand basket list stood Hong Kong stocks like ZIJIN MINING (02899.HK)  +0.180 (+0.947%)    Short selling $274.95M; Ratio 24.687%   , CHOW TAI FOOK, and HAIDILAO.
(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2025-06-20 16:25.)

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