Important Information
Investors should not base investment decisions on this content alone. Please refer to the Prospectus for details including product features and the risk factors. Investment involves risks. Past performance is not indicative of future performance. There is no guarantee of the repayment of the principal. Investors should note:
- Global X China Electric Vehicle and Battery ETF’s (the “Fund’s”) investment in equity securities is subject to general market risks, whose value may fluctuate due to various factors, such as changes in investment sentiment, political and economic conditions and issuer-specific factors.
- Electric vehicle companies invest heavily in research and development which may not necessarily lead to commercially successful products. In addition, the prospects of Electric vehicle companies may significantly be impacted by technological changes, changing governmental regulations and intense competition from competitors.
- China is an emerging market. The Fund invests in Chinese companies which may involve increased risks and special considerations not typically associated with investments in more developed markets, such as liquidity risk, currency risks, political risk, legal and taxation risks, and the likelihood of a high degree of volatility.
- The trading price of the Fund’s unit (the “Unit”) on the Stock Exchange of Hong Kong is driven by market factors such as demand and supply of the Unit. Therefore, the Units may trade at a substantial premium or discount to the Fund’s net asset value.
- The Fund’s synthetic replication strategy will involve investing up to 50% of its net asset value in financial derivative instruments (“FDIs”), mainly funded total return swap transaction(s) through one or more counterparty(ies). Risks associated with FDIs include counterparty/credit risk, liquidity risk, valuation risk, volatility risk and over-the-counter transaction risk. FDIs are susceptible to price fluctuations and higher volatility, and may have large bid and offer spreads and no active secondary markets. The leverage element/component of an FDI can result in a loss significantly greater than the amount invested in the FDI by the Sub-Fund.
- As part of the securities lending transactions, there is a risk of shortfall of collateral value due to inaccurate pricing of the securities lent or change of value of securities lent. This may cause significant losses to the Fund. The borrower may fail to return the securities in a timely manner or at all. The Fund may suffer from a loss or delay when recovering the securities lent out. This may restrict the Fund’s ability in meeting delivery or payment obligations from realisation requests.
- Global X Hang Seng TECH ETF (the “Fund”) seeks to provide investment results that, before deduction of fees and expenses, closely correspond to the performance of the Hang Seng TECH Index (the “Index”).
- The Fund’s investments are concentrated in companies with a technology theme. Technology companies are often characterised by relatively higher volatility in price performance. Companies in the technology sector also face intense competition, and there may also be substantial government intervention, which may have an adverse effect on profit margins. These companies are also subject to the risks of loss or impairment of intellectual property rights or licences, cyber security risks resulting in undesirable legal, financial, operational and reputational consequences.
- The Fund’s investments are concentrated in securities listed on the Stock Exchange of Hong Kong (the “SEHK”) of companies that are active in technology sector may result in greater volatility in the value of the Fund than more diverse portfolios which comprise broad-based global investments. The value of the Fund may be more susceptible to adverse economic, political, policy, foreign exchange, liquidity, tax, legal or regulatory event affecting the technology sector.
- The Index is subject to concentration risk as a result of tracking the performance of securities incorporated in, or with majority of revenue derived from, or with a principal place of business in, the Greater China region. The Fund’s NAV is therefore likely to be more volatile than a broad-based fund.
- As part of the securities lending transactions, there is a risk of shortfall of collateral value due to inaccurate pricing of the securities lent or change of value of securities lent. This may cause significant losses to the Fund. The borrower may fail to return the securities in a timely manner or at all. The Fund may suffer from a loss or delay when recovering the securities lent out. This may restrict the Fund’s ability in meeting delivery or payment obligations from realisation requests.
- The trading price of the Fund unit (the “Unit”) on the SEHK is driven by market factors such as demand and supply of the Unit. Therefore, the Units may trade at a substantial premium or discount to the Fund’s net asset value.
- Dividends may be paid from capital or effectively out of capital of the Fund, which may amount to a return or withdrawal of part of an investor’s original investment or from any capital gains attributable to that original investment and result in an immediate reduction in the Net Asset Value per Unit of the Fund.
- Global X China Clean Energy ETF’s (the “Fund’s”) investment in equity securities is subject to general market risks, whose value may fluctuate due to various factors, such as changes in investment sentiment, political and economic conditions and issuer-specific factors.
- Many clean energy companies are involved in the development and commercialization of new technologies, which may be subject to delays resulting from budget constraints and technological difficulties. Obsolescence of existing technology, short product cycles, falling prices and profits, competition from new market entrants and general economic conditions also significantly affect the clean energy sector.
- China is an emerging market. The Fund invests in Chinese companies which may involve increased risks and special considerations not typically associated with investments in more developed markets, such as liquidity risk, currency risks, political risk, legal and taxation risks, and the likelihood of a high degree of volatility.
- The trading price of the Fund’s unit (the “Unit”) on the Stock Exchange of Hong Kong is driven by market factors such as demand and supply of the Unit. Therefore, the Units may trade at a substantial premium or discount to the Fund’s net asset value.
- The Fund’s synthetic replication strategy will involve investing up to 50% of its net asset value in financial derivative instruments (“FDIs”), mainly funded total return swap transaction(s) through one or more counterparty(ies). Risks associated with FDIs include counterparty/credit risk, liquidity risk, valuation risk, volatility risk and over-the-counter transaction risk. FDIs are susceptible to price fluctuations and higher volatility, and may have large bid and offer spreads and no active secondary markets. The leverage element/component of an FDI can result in a loss significantly greater than the amount invested in the FDI by the Sub-Fund.
- As part of the securities lending transactions, there is a risk of shortfall of collateral value due to inaccurate pricing of the securities lent or change of value of securities lent. This may cause significant losses to the Fund. The borrower may fail to return the securities in a timely manner or at all. The Fund may suffer from a loss or delay when recovering the securities lent out. This may restrict the Fund’s ability in meeting delivery or payment obligations from realisation requests.
- Global X China Consumer Brand ETF’s (the “Fund’s”) investment in equity securities is subject to general market risks, whose value may fluctuate due to various factors, such as changes in investment sentiment, political and economic conditions and issuer-specific factors.
- The performance of companies in the consumer sector are correlated to the growth rate of the global market, individual income levels and their impact on levels of domestic consumer spending in the global markets, which in turn depend on the worldwide economic conditions, which have recently deteriorated significantly in many countries and regions and may remain depressed for the foreseeable future.
- China is an emerging market. The Fund invests in Chinese companies which may involve increased risks and special considerations not typically associated with investments in more developed markets, such as liquidity risk, currency risks, political risk, legal and taxation risks, and the likelihood of a high degree of volatility.
- The trading price of the Fund’s unit (the “Unit”) on the Stock Exchange of Hong Kong is driven by market factors such as demand and supply of the Unit. Therefore, the Units may trade at a substantial premium or discount to the Fund’s net asset value.
- The Fund’s synthetic replication strategy will involve investing up to 50% of its net asset value in financial derivative instruments (“FDIs”), mainly funded total return swap transaction(s) through one or more counterparty(ies). Risks associated with FDIs include counterparty/credit risk, liquidity risk, valuation risk, volatility risk and over-the-counter transaction risk. FDIs are susceptible to price fluctuations and higher volatility, and may have large bid and offer spreads and no active secondary markets. The leverage element/component of an FDI can result in a loss significantly greater than the amount invested in the FDI by the Sub-Fund.
- As part of the securities lending transactions, there is a risk of shortfall of collateral value due to inaccurate pricing of the securities lent or change of value of securities lent. This may cause significant losses to the Fund. The borrower may fail to return the securities in a timely manner or at all. The Fund may suffer from a loss or delay when recovering the securities lent out. This may restrict the Fund’s ability in meeting delivery or payment obligations from realisation requests.
- Global X China Robotics and AI ETF’s (the “Fund’s”) investment in equity securities is subject to general market risks, whose value may fluctuate due to various factors, such as changes in investment sentiment, political and economic conditions and issuer-specific factors.
- Robotics and artificial intelligence sector is sensitive to risks including small or limited markets for such securities, changes in business cycles, world economic growth, technological progress, rapid obsolescence, and government regulation. These companies rely on significant spending on research and development and tend to be more volatile than securities of companies that do not rely heavily on technology.
- China is an emerging market. The Fund invests in Chinese companies which may involve increased risks and special considerations not typically associated with investments in more developed markets, such as liquidity risk, currency risks, political risk, legal and taxation risks, and the likelihood of a high degree of volatility.
- The trading price of the Fund’s unit (the “Unit”) on the Stock Exchange of Hong Kong is driven by market factors such as demand and supply of the Unit. Therefore, the Units may trade at a substantial premium or discount to the Fund’s net asset value.
- The Fund’s synthetic replication strategy will involve investing up to 50% of its net asset value in financial derivative instruments (“FDIs”), mainly funded total return swap transaction(s) through one or more counterparty(ies). Risks associated with FDIs include counterparty/credit risk, liquidity risk, valuation risk, volatility risk and over-the-counter transaction risk. FDIs are susceptible to price fluctuations and higher volatility, and may have large bid and offer spreads and no active secondary markets. The leverage element/component of an FDI can result in a loss significantly greater than the amount invested in the FDI by the Sub-Fund.
- As part of the securities lending transactions, there is a risk of shortfall of collateral value due to inaccurate pricing of the securities lent or change of value of securities lent. This may cause significant losses to the Fund. The borrower may fail to return the securities in a timely manner or at all. The Fund may suffer from a loss or delay when recovering the securities lent out. This may restrict the Fund’s ability in meeting delivery or payment obligations from realisation requests.
- Global X China Semiconductor ETF’s (the “Fund’s”) investment in equity securities is subject to general market risks, whose value may fluctuate due to various factors, such as changes in investment sentiment, political and economic conditions and issuer-specific factors.
- Semiconductor industry may be affected by particular economic or market events, such as domestic and international competition pressures, rapid obsolescence of products, the economic performance of the customers of semiconductor companies and capital equipment expenditures. These companies rely on significant spending on research and development that may cause the value of securities of all companies within this sector of the market to deteriorate.
- China is an emerging market. The Fund invests in Chinese companies which may involve increased risks and special considerations not typically associated with investments in more developed markets, such as liquidity risk, currency risks, political risk, legal and taxation risks, and the likelihood of a high degree of volatility.
- The trading price of the Fund’s unit (the “Unit”) on the Stock Exchange of Hong Kong is driven by market factors such as demand and supply of the Unit. Therefore, the Units may trade at a substantial premium or discount to the Fund’s net asset value.
- The Fund’s synthetic replication strategy will involve investing up to 50% of its net asset value in financial derivative instruments (“FDIs”), mainly funded total return swap transaction(s) through one or more counterparty(ies). Risks associated with FDIs include counterparty/credit risk, liquidity risk, valuation risk, volatility risk and over-the-counter transaction risk. FDIs are susceptible to price fluctuations and higher volatility, and may have large bid and offer spreads and no active secondary markets. The leverage element/component of an FDI can result in a loss significantly greater than the amount invested in the FDI by the Sub-Fund.
- As part of the securities lending transactions, there is a risk of shortfall of collateral value due to inaccurate pricing of the securities lent or change of value of securities lent. This may cause significant losses to the Fund. The borrower may fail to return the securities in a timely manner or at all. The Fund may suffer from a loss or delay when recovering the securities lent out. This may restrict the Fund’s ability in meeting delivery or payment obligations from realisation requests.
- Global X China Little Giant ETF’s (the “Fund’s”) objective is to provide investment results that, before fees and expenses, closely correspond to the performance of the Solactive China Little Giant Index (the “Index”).
- The Index is a new index. The Index has minimal operating history by which investors can evaluate its previous performance. There can be no assurance as to the performance of the Index. The Fund may be riskier than other exchange traded funds tracking more established indices with longer operating history.
- The Fund may invest in small and/or mid-capitalisation companies which may have lower liquidity and their prices are more volatile to adverse economic developments than those of larger capitalisation companies in general.
- The Fund’s investments are concentrated in companies which are characterised by relatively higher volatility in price performance. The Sub-Fund may be exposed to risks associated with different sectors and themes including semiconductor, industrial, pharmaceutical, energy and technology. Fluctuations in the business for companies in these sectors or themes will have an adverse impact on the net asset value of the Sub-Fund. Some of the companies classified as the Little Giants have a relatively short operating history. Such companies also face intense competition and rapid changes could render the products and services offered by these companies obsolete, which may have an adverse effect on profit margins. They may be more susceptible to risks of loss or impairment of intellectual property rights or licences, cyber security risks resulting in undesirable legal, financial, operational and reputational consequences affecting those companies.
- The Mainland China is an emerging market. The Fund invests in Mainland Chinese companies which may involve increased risks and special considerations not typically associated with investment in more developed markets, such as liquidity risk, currency risks or control, political and economic uncertainties, legal and taxation risks, settlement risks, custody risk and the likelihood of a high degree of volatility. Securities exchanges in the Mainland Chinese markets typically have the right to suspend or limit trading in any security traded on the relevant exchange. The government or the regulators may also implement policies that may affect the financial markets. All these may have a negative impact on the Fund.
- Listed companies on the ChiNext market and/or STAR Board are subject to higher fluctuation on stock prices and liquidity risk, over-valuation risk, less stringent regulation risk, delisting risk and concentration risk.
- As part of the securities lending transactions, there is a risk of shortfall of collateral value due to inaccurate pricing of the securities lent or change of value of securities lent. This may cause significant losses to the Fund. The borrower may fail to return the securities in a timely manner or at all. The Fund may suffer from a loss or delay when recovering the securities lent out. This may restrict the Fund’s ability in meeting delivery or payment obligations from redemption requests.
- The Fund’s synthetic replication strategy will involve investing up to 50% of its net asset value in financial derivative instruments (“FDIs”), mainly funded total return swap transaction(s) through one or more counterparty(ies). Risks associated with FDIs include counterparty/credit risk, liquidity risk, valuation risk, volatility risk and over-the-counter transaction risk. FDIs are susceptible to price fluctuations and higher volatility, and may have large bid and offer spreads and no active secondary markets. The leverage element/component of an FDI can result in a loss significantly greater than the amount invested in the FDI by the Fund.
- The trading price of the Shares on the SEHK is driven by market factors such as the demand and supply of the Shares. Therefore, the Shares may trade at a substantial premium or discount to the Fund’s Net Asset Value.
- Payments of distributions out of capital or effectively out of capital amounts to a return or withdrawal of part of an investor’s original investment or from any capital gains attributable to that original investment. Any such distributions may result in an immediate reduction in the Net Asset Value per Share of the Fund and will reduce the capital available for future investment.
Monthly Commentary
China Thematic ETFs – March 2025
Global X China Electric Vehicle and Battery ETF (2845 HK)
Industry Update
- February 25 EV sales declined sequentially on seasonality: According to CPCA estimates, February NEV retail sales volume was 720k, -3% MoM due to seasonality, while YoY growth was solid at +26% YoY from a low base. Individual brands recorded divergent sales trend in February. BYD reported February NEV PV sales of 318k units, +161% YoY and +7% MoM. Overseas sales remain the bright spot with record high 67k units (+1% MoM), growing PHEV exports and foreign production ramping up will likely continue to propel solid overseas momentum. Xpeng remains as the best-selling start-ups with 30.5k units in February, while sales for Li Auto weakened sequentially. Xiaomi saw continued demand for its best-selling SU7 model selling >20k units in February. (for reference only, abovementioned stocks are not necessarily in the constituent list of the ETF).
- ADAS gaining traction: The strong performance and low costs for DeepSeek AI model ignites hopes for AI application acceleration, and autonomous driving could be among the key AI use cases. BYD is bringing its “God’s Eye” smart driving system to mass market model, which should accelerate overall smart driving adoption in China.
- Xiaomi SU7 Ultra launch: Xiaomi launched SU7 Ultra on 27 February 2025, priced at Rmb529.9k, substantially lower than previously disclosed price of over Rmb800k. SU7 Ultra received over 10k orders within 2 hours of launch.
- Battery material costs remained low: Battery grade lithium carbonate price was Rmb75.6k/ton, -0.5% wow, -26%/-29%/-7%/-1% vs. average of 1Q24/2Q24/3Q24/4Q24.1 Battery materials prices have decreased by over 80% from its peak in 2022, supporting the continued cost optimization for battery makers and EV manufacturers.
Stock Comments
- BYD recorded 32% return in February, a key contributor to the ETF. BYD announced launch of 21 new smart driving vehicle models without price increases on 10 February. With the new model launch, BYD is bringing highway NOA and valet parking functions to mass market model. BYD’s PV sales recovered sequentially MoM following the debut of God’s Eye ADAS.
- Li Auto recorded 32% return in February, a key contributor to the ETF. The stock rallied sharply after Li Auto unveiled two photos of its upcoming BEV i8, its second BEV model. Though no detailed spec of the model has been announced yet, some features such as fast-charging capability and intelligent capability could support its potential success.
Preview
We remain positive on the long term growth potential for EV and battery value chain, along with the upward EV penetration trajectory. Domestic old car replacement demand, as stimulated by scaled-up auto trade-in program (which has been extended in 2025), together with export sales, should support China’s resilient auto momentum and benefit leading domestic brands. We expect the China auto market to stay competitive with strong new product line-up and technology innovations from leading EV and battery brands, and new entrants such as Xiaomi. BYD’s launch of God’s Eye ADAS in mass market model should accelerate smart driving adoption in China. Geopolitical tensions remain the key risks, but China EV models will still remain competitive under new tariff landscape thanks to its cost advantages. Localized production will be the longer term solution for Chinese brands.
Global X Hang Seng TECH ETF (2837 HK)
Industry Update
Global X Hang Seng Tech ETF (2837 HK) recorded positive return in February. AI theme continues to gain traction in Hong Kong market, with key players like Alibaba continue updating its AI initiatives. Major cloud providers are benefiting from increasing AI related demand, with Alibaba and Baidu both recorded accelerated cloud revenue growth, further supporting positive sentiments. We see more AI models emphasising cost efficiency, which should accelerate AI adoption and benefit software and internet companies. Concerns over escalating US-China geopolitical tensions under Trump presidency and policy supports for domestic chip development continue to drive the elevated sentiments on China semiconductor sector, leading to outperformance of leading domestic players like SMIC. With a clear change in policymaker stance, the gradual rollout of stimulus policies could support a revived consumer sentiments that will benefit sectors including ecommerce, advertising, EV, and 3C electronics. Online gaming sector remains less macro-dependent and continued to record solid revenue supported by high quality games.
Stock Comments
- Alibaba recorded 44% return in February, a key contributor to the ETF. Alibaba reported solid 3QF25 results in February, with CMR growing 9% YoY, beating market expectation by a large margin, driven by GMV growth with take rate improvement. Cloud computing revenue growth accelerated to +13% YoY. Management is seeing strong AI inference demand and plans to rapidly step up CAPEX in the coming 3 years. Additionally, Alibaba launched open-source QwQ-32B AI model with top performance but substantially smaller scales and lower costs.
- Xiaomi recorded 35% return in February, a key contributor to the ETF. Xiaomi launched two premium products – Xiaomi 15Ultra smartphone and SU7 Ultra EV in Feb, a milestone for Xiaomi’s luxury product journey. High-end product launch could enhance Xiaomi’s margin and improve its brand image. Xiaomi SU7 Ultra is priced at Rmb529.9k, substantially lower than previously disclosed. The car received over 10k order within 2 hours of launches.
Preview
Hang Seng Technology Index constituents are well positioned to benefit from the policy stimulus by central government. We see unique positioning of Hang Seng Tech thanks to its attractive valuation, ongoing margin expansion, and continued ramp up in shareholder returns. With well-established ecosystem containing large user base and leading technology in place, we see further upside potential for these leading technology companies coming from the rapid development of structural growth themes such as EV, Semiconductor and AI in China.
Global X China Clean Energy ETF (2809 HK)
Industry Update
NDRC and NEA jointly issued a notice on February 9th, 2025 on deepening market reforms of on-grid tariff of renewables. Tariff policy for projects connected before June 1st, 2025 will largely remain unchanged, while for new projects after June 1st, all participate in market-based trading. Additionally, ESS is not forced as a predominant condition for on-grid tariff any more. The reform aimed at promoting the market-driven renewables trading and enhancing competition on electricity prices. It will, consequently, lead to spot power prices coming down structurally, especially during times when solar/wind generation is strong, and raise uncertainty over future returns for investors. We will also likely see a surge in project installations before the deadline.
The renewables installation numbers for the first two months of the year are yet to come, but we have seen marginally prices hike in solar modules and solar glass, driven by supply side reform, Europe restocking and domestic rush installation. Solar module prices were up by Rmb3-5cents per watt in early March, and solar glass prices up by Rmb1.0 per square meter.
Stock Comments
- LONGi Green Energy Technology Co., Ltd. Class A: The company’s BC products are leading in technology. Demand and unit profits of BC products are sequentially recovering.
- Jinko Solar Co., Ltd. Class A: Jinko’s Topcon products are leading in profitability and technology, despite oversupply issues. People expect earnings marginal improvement after supply side reform in solar industry.
- TCL Zhonghuan Renewable Energy Technology Co., Ltd. Class A: Company suffered from wafer oversupply and are relatively lagging in new technology innovation.
Preview
We expect European solar power demand to significantly improve, driven by restocking and continuous power demand growth. China’s supply-side policies on solar may take more time to play out, despite the worst time behind. We are constructive on China’s wind equipment exporting for better profitability from exporting. We remain constructive on the global clean energy growth and the trend of energy transition, just staying cautious about the near-term broad mismatch between supply and demand.
Global X China Consumer Brand ETF (2806 HKD)
Industry Update
Consumer was reaffirmed as policy focus during recent Two Sessions, and more consumer stimulus policies are likely to announce soon. During Two Sessions, the central government introduced a series of supportive consumption measures, including Rmb300bn Central Government Special Bonds funding for trade-in program, increase of minimum standard of basic pension for urban and rural residents, wage hike for civil servants, increase of the basic pension plan for retirees, and enhancement of childcare related services, which we view as positive to consumption recovery and sentiment improvement. Additionally, the government indicated that a new consumption stimulus package is forthcoming, reinforcing its commitment to supporting the consumer sector. Improvements in the macroeconomy, driven by the stabilization of the property market and ongoing debt restructuring, are also anticipated to have a direct positive effect on consumer sentiment.
Stock Comments
- Li Auto (Li US): Li Auto achieved 32% return in February. On Feb 25, Li Auto unveiled the first official image of its BEV SUV, the i8, which is likely to debut in this July. This early release of the i8 image has exceeded market expectations and addresses concerns about delays in Li Auto’s BEV development, demonstrating the company’s ability to make timely adjustments. Additionally, the launch of Tesla’s FSD in China is expected to boost the trend of intelligent driving, benefiting manufacturers like Li Auto that excel in advanced driving technologies.
- Fen Wine (600809 CH): Fen Wine recorded 18% return in February. During CNY, Fen Wine recorded HSD% retail sales growth, outperforming industry average. Following the holiday season, shipments have remained controlled, ensuring that channel inventory stays at a healthy level. The new product, Qinghua 26, is also performing well in the market. On February 17, Fen Wine announced a suspension of shipments for Qinghua 20 and Laobaifen 10 to facilitate upgrades to their 5-code editions, while also working to reduce inventory of earlier versions.
- Trip.com (TCOM US): Trip.com experienced 21% loss in February mainly due to weak management guidance. TCOM guided a contraction in margins due to an increase in overseas marketing expenditures to drive growth in its international platforms, while market anticipated a modest margin expansion supported by efficiency gains and scalability earlier. Nevertheless, TCOM delivered robust 4Q24 results with total revenue increasing 23% YoY, driven by a remarkable growth of over 70% YoY in its international OTA platforms, as well as a doubling of inbound tourism.
Preview
We believe policy stimulus remains key to enhancing consumer sentiment and bolstering stock performance for China consumer in 2025. Consumption was reaffirmed as a top policy focus during Two Sessions, and additional consumer stimulus policies are expected to be introduced. We expect that macroeconomic recovery, supported by policies and the stabilization of the property market, presents the largest upside risk for China consumer sector in 2025, especially given that demand was under pressure across nearly all subsectors in 2024. However, as the specifics regarding the timing and scale of policy implementation remain unclear, we expect consumption recovery to unfold gradually, with a more noticeable improvement likely in 2H25. More time will be needed before fundamentals improve under the current policy setup. Among subsector, we favour those that are directly targeted by stimulus policies, such as home appliance and EV under extended consumer goods trade-in programs, as well as sectors sensitive to macroeconomic changes, such as Baijiu, Catering and beverage.
Global X China Robotics and AI ETF (2807 HK)
Industry Update
Elon Musk’s bullish guidance of humanoid robots shipment in 2025 brought Chinese robots components supply chain in the spotlight, coupled with Unitree robots dance show in Spring Festival Gala. We witnessed increasing Chinese companies are accelerating their R&D in robots-related components business, shifting their focus from traditional business such as auto components, automation, general industrials, etc. We also see more automation are used in traditional industries, for example, automated painting machinery in shipbuilding. In 2024, robot demand from home applicance, 3C and auto electrics, semiconductor, auto parts and metal products segment grew by 10%+yoy. MIR(Market Intelligent Resource) expected the demand will further increase by 10~12%yoy in 2025-2027E. As the key beneficiary from robots and automation demand growth, Chinese players’ market share will continue going up.
Stock Comments
- Shenzhen Inovance Technology Co., Ltd. Class A: China automation demand was better than feared in the first two months of 2025. Additionally, Inovance is seen as the beneficiary from humanoid robots market growth in the future, considering their strong technology and product development capabilities in servo drives and motors.
- Shenzhen Zhaowei Machinery & Electronic Co., Ltd. Class A: The company is leading in the robots’ dexterous hands technology. It is reportedly they will supply micro motors to Tesla’s robots.
- Zhongji Innolight Co., Ltd. Class A: Sales were sequentially slowing down in the second half of 2024, coupled with investors’ concerns on AI computing power demand.
Preview
China’s FAI in advanced manufacturing and technology have been strong despite the overall economy slowdown. Robotics, AI and automation are one of the key beneficiaries from both the government’s stimulus measures in the near term and the economy transition goal in the long run. We expect more demand and investment in robots sectors in China in 2025. Consequently, the technology-leading component producers will be one of the key beneficiaries going forward.
Global X China Semiconductor ETF (3191 HK)
Industry Update
TSMC announced additional $100 billion investment in the US
announced its intention to expand its investment in advanced semiconductor manufacturing in the United States by an additional $100 billion. Building on the company’s ongoing $65 billion investment in its advanced semiconductor manufacturing operations in Phoenix, Arizona, TSMC’s total investment in the U.S. is expected to reach US$165 billion. The expansion includes plans for three new fabrication plants, two advanced packaging facilities and a major R&D team center (TSMC).
MediaTek reported solid results and guidance
4Q slight beat: Revenue +5% QoQ/7% YoY ahead of the high end of guidance +2% QoQ. 4Q24 GM was 48.5% ahead of street. Increase opex for the ASIC and smartphone business development means the opex ratio is higher at 33% vs street at 29%. EPS of 14.95 was around 5% ahead of street. 1Q guidance beat: Mediatek guided a better-than-expected 1Q25 outlook at 6% qoq growth (at midpoint), due to mid-end smartphone volume uptick from China consumption subsidies. (Mirae Asset, MediaTek)
Stock Comments
- SMIC +41.34% – SMIC guides for 6-8% Q/Q revenue growth in 1Q25, beating consensus’ -3%. 1Q gross margin of 19-21% is in-line with consensus of 18.4%. We believe a strong 1Q will be attributable to the product mix, driven by the China consumption subsidy, as well as high wafer prices for advanced node production. On a full-year basis, SMIC expects revenue to grow faster than the peer average.
- Will Semi +34.39% – Market expect the company to benefit from smartphone subsidy program in China. Will semi is also a key auto CIS supplier, China auto makers like BYD plans to increase the ADAS penetration significantly in 2025.
Preview
Increasing AI adoption in the data centre and increasing penetration of AI at the edge and on-device will be the key enabler of next upcycle semiconductor as AI-enabled devices have much higher semi-content. We expect volume growth in end devices to drive broad-based semiconductor cycle recovery in 2025. (Mirae Asset 2025)
Global X China Little Giant ETF (2815 HK)
Market Update
During Two Sessions, Central government showcased its efforts to drive technology innovation by improving market ecosystem, promoting AI adoption and intelligent terminals developments. The groundbreaking release of DeepSeek by a Chinese AI start-up demonstrated China’s growing prowess in technological innovation and highlights the sophistication and high quality of the country’s SMEs. The key overhangs in the near term are the tariff and US policies, which might reinforce the top leadership’s commitment to enhancing supply chain upgrades and achieving self-sufficiency. We still expect promoting emerging industries to climb up technology tree and supporting domestic substitution remain policies priorities in 2025. Therefore, these specialized and sophisticated SMEs play a crucial role in China’s transition to high quality development. As a high-quality, small-cap fund, Global X China Little Giant ETF is likely to benefit from government’s supportive policies on tech innovation and may outperform large-cap funds if the economy turns to strong recovery in 2025.
Stock Comments
Piotech (688072 CH) – 4Q24 revenues at +72%~92% YoY to Rmb1.72bn~Rmb1.92bn, with 2024 full year result growth at 48%~55% YoY to Rmb4.0bn~Rmb4.2bn, higher than market expected. Company expects new orders and shipment ramp up from PECVD/ ALD tools and new products (SACVD, HDPCVD, Flowable CVD, Hybrid bonding).
Market sentiment of China semiconductor industry has also improved from both domestic substitution trend and China’s AI development. Potential M&A within China semiconductor industry might also boost relevant names.
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