Goldman Sachs is calling you to “do more in China”: behind the strong rebound in the market, these sectors and logic are worth paying attention to

On August 14, the Zhitong Finance App learned that Goldman Sachs once again made a big statement after a lapse of half a year, clearly stating “enter the market again and do more in China.” Recently, the trend in the Chinese market has been strong. Whether it is Hong Kong stocks or A shares, various indices have continued to rise. Behind this is the resonance of multiple factors such as policy, performance, and capital. What are the highlights of the current market, and how should it be arranged?

Both Hong Kong stocks and the mainland market are rising like a rainbow, with multiple indices gaining strength — southbound capital inflows into Hong Kong stocks are accelerating. On August 15, despite a slight correction in the three major indices of Hong Kong stocks, the net purchase of southbound capital was about HK$35.876 billion, setting a record record for the highest single-day net purchase. This year's cumulative net inflow reached HK$938.921 billion, far exceeding HK$807.869 billion last year.

The volume of the three major A-share indices surged today, and the Shanghai Index once again returned to around 3,700 points. The turnover exceeded 2.2 trillion dollars, making it the 29th trading day in A-share history where the turnover surpassed 2 trillion dollars.

Since the beginning of April, the Shanghai and Shenzhen 300 Index has continued to rise in April, and is expected to set the record for the longest continuous rise since 2020. Among them, the small and medium capitalization index, which mainly focuses on technology stocks, performed particularly well. The Shanghai and Shenzhen 1000 Index (excluding OFAC constituent stocks) has accumulated a cumulative increase of more than 12%. More importantly, this round of rebound was not a “false fire” — the average monthly turnover of A-shares increased for three consecutive months, and actual trading activity supported the market.

Five core driving forces to support market confidence

1. Strong policies: consumption and industry go hand in hand

The government recently launched an interest subsidy program for personal consumption loans, which directly boosted consumer confidence; in the field of new energy, eight lithium battery companies reached a consensus to “suspend production expansion”, and “anti-domestic” actions promoted industry valuation repair, and related stock prices rose sharply. The policy not only boosted demand, but also stabilized supply, giving the market a reassurance pill.

2. Tech stock performance explodes: AI becomes the biggest catalyst

The technology earnings season has begun, and leading companies have performed brilliantly:

Tencent's revenue for the second quarter of 2025 was 752.06 billion yuan, with adjusted earnings of 27.52 yuan per share, exceeding market expectations by 3%; benefiting from AI-driven marketing efficiency improvements, Tencent's marketing service revenue increased 20% year over year, with video accounts and applet ads all rising 50% and WeChat search ads rising 60%; game revenue increased 22% year over year, and classic IPs such as “Delta Force” continued to contribute; fintech and corporate services revenue increased 10%, and demand for AI-related services surged.

In addition to Tencent, companies such as JD and NetEase also handed over steady responses: JD's core retail profit increased 38% year over year, NetEase game revenue and deferred revenue all maintained double-digit growth, and the “evergreen nature” of established IPs was highlighted.

3. Strong funding: retail investors lead, emotions are not overheated

In this round of the market, retail investors have become the main force — the balance of securities financing has broken through a ten-year high, reaching 2020.35 billion yuan, yet Goldman Sachs retail sentiment indicators show that it is still moderate and there is no excessive fanaticism, which means there is still room for growth in the future.

(Outstanding balance of A-share financing and securities lending transactions; the yellow line is a 10-year high)

It is worth noting that the “national team” is operating calmly, which indicates that the rise in the market relies more on “real demand” rather than short-term policy support, and the foundation is more solid.

4. Expectations for foreign investment to “make up” are heating up

According to Goldman Sachs data, its Prime brokerage book showed a net outflow to the Chinese market in July, but there is a divergence between the current nominal total market value and net market value. The agency believes that if global capital is concentrated to make up purchases, it may further amplify upward momentum. Furthermore, the basket of stocks most affected by shorting in Hong Kong rose 2.7%, surpassing the Hang Seng Index's increase, and short compensation also helped the market.

5. Liquidity is protected

China's liquidity supply increased 4.6% year-on-year in June, the biggest increase in more than two years. A rich capital environment not only hedged potential profit settlement pressure, but also provided continuous support to the stock market.

Layout ideas: focus on these directions

The Goldman Sachs trading desk clearly stated that it still favors Hong Kong stocks and the small and medium capitalization index for A-shares (China Stock Exchange 500/1000).

Looking at specific sectors, Goldman Sachs's preferred direction is:

Technology and AI industry chain: AI applications from companies such as Tencent and Jingdong have seen results. Semiconductors (such as Ruijie Network, Shentong Computer) and data centers (Universal Data, Century Internet) have benefited from the explosion in computing power demand, and segments such as 800G switches are growing at an astonishing rate.

Consumer recovery chain: Policy subsidies directly benefit industries related to consumer loans. Combined with improvements in the fundamentals of retail enterprises (such as the increase in retail profits in JD), we can focus on high-quality consumer leaders.

“Anti-internal circulation” industry: sectors where production capacity consensus has been reached, such as lithium batteries and photovoltaics. The competitive pattern is optimized, and the profits of leading companies are expected to recover.

High-growth small and medium markets: Most of the constituent stocks of the China Securities 1000 Index are hidden champions in the segment. Benefiting from liquidity easing and industrial upgrading, flexibility is worth looking forward to.

The current rebound in the Chinese market is the result of policy, performance, and financial resonance. Goldman Sachs's “go long” signal is probably a confirmation of this trend.

For investors, grasping the main lines of technological upgrading, consumption recovery, and industrial optimization may be able to find their own opportunities in this market.