The Chinese internet sector delivered strong performance in 2025, with DeepSeek leading domestic AI trends, CLSA opined in a research report. The growth was expected to carry forward into 2026, particularly with intensified competition in agentic and video generation applications. China and the US will engage in direct competition globally in AI models, applications, cloud services, and autonomous driving (Robotaxi).Despite geopolitical challenges, Chinese gaming and e-commerce sectors continued to expand briskly in overseas markets. However, the broker maintained a cautious outlook on the domestic e-commerce sector. In terms of investment strategy, CLSA favored AI, gaming, and health-related sectors, forecasting sector revenue and adjusted EBIT to grow by 12% and 29% YoY, respectively, and believed China is poised to lead globally in AI application implementation.Related News G Sachs Expects JD-SW (09618.HK) 2H Earnings to Recover, Maintains BuyCLSA named six top picks for 2026, including TENCENT (00700.HK) +6.400 (+1.400%) Short selling $1.68B; Ratio 16.232% , XIAOMI-W (01810.HK) +0.360 (+1.393%) Short selling $826.53M; Ratio 23.909% , BABA-W (09988.HK) +2.800 (+2.607%) Short selling $1.11B; Ratio 13.560% , NETEASE MUSIC (09899.HK) +8.200 (+7.289%) Short selling $23.86M; Ratio 6.508% , KUAISHOU-W (01024.HK) +0.240 (+0.526%) Short selling $378.61M; Ratio 19.360% , and JD HEALTH (06618.HK) -0.140 (-0.369%) Short selling $137.83M; Ratio 22.518% , specifically highlighting optimism about BABA-W's cloud business, TENCENT's AI applications, and XIAOMI-W's consumer AI devices.(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-06-12 16:25.)
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