How are you going to get there. Earnings growth. Mostly
I think if we look at the underlying listening universe revenue has been growing faster than average economy. And then the
margins have also been expanding since 2020. And the quality companies that is more obvious because upstream pricing has been
firming up. Yeah. And then consolidation adding to market share and pricing power. And so the list that universe in the
aggregate are doing better. But there are also the fading of the so-called old hero which is property. And it's very much in the
headlines. But if we look at its weighting in the index MSCI China I think it's 4 percent. Yeah. So earnings I'm looking at
the current forecast. It doesn't seem like that would support us getting to 6000. What you're seeing is the market's due for a
rerating and earnings expectations for next 18 percent earnings squirrels and then the marginal expansion in the multiples. When
we look at the historical trading pattern in 2018 and so far this year U.S. China relationship has been a very big swing
factor and it's a factor of three standard deviations in terms of PE multiples. So if there is some improvement or moderation.
Yeah. Toward a pretty low base right now that we have that pretty easily. I think on
the other side of that trade is Bank of America. And they were saying look when it comes to tighter financial conditions that
doesn't bode well for earnings growth. What what do you say about that
either. That was probably true before the policy trough but we just have the policy chops. So we're waiting for the credit
trough. We're waiting for the earnings trial. Right. And I think the earnings already a move ahead of us because the bigger story
which is untold is enterprise CapEx. It's up about 13 percent this year. It's a 30 percent of total FDI you put in for our
property together is about 41 percent. And what we look at the A shares. Yeah. In our year ahead we did a deep dive into it. Cash
balance. Earnings are picking up in the past 12 months and generally that leads to better CapEx in the year ahead. And so
that component is about 18 percent of the MSCI China.
Not all of it but a sizable portion of it. And it has to be better or bigger than property at 4 percent. That partially only
becomes true if the credit impulse turns. And that's still negative though right now in terms of because we've seen some
policy support. We've seen a policy trough as you point out whether the economy feels that incorporates field and start
spending. Well I guess my question is what is your expectation on a credit impulses that turn positive next year. Yeah.
So we had a swing factor about 14 percent from positive ten point seven at the beginning of the year and negative 3 in
November. So our economist is looking for this to go up to positive 1 percent. And so directionally
directionally it's better. But I would think if you look at a lot of the lending facilities
this year so far this year it's very targeted. Yeah. For certain sectors the green sectors. So I think you have that. It's just
one part of the new hero sectors coming through as the old heroes are exiting. And so I think it for our clients they're
very worried about the old heroes exiting creating negative spill over. So what are the new heroes now. New heroes would be
you know Eevee and renewable which in the eight years have done very well 300 CSI 300. You know the best performers are from
those two ecosystems. I would add I.T. software
you know hardware semi in that camp also Internet platforms Internet platforms. I think the market as you've seen have been
trying to pick the bottom. Yeah. And we stay cautious and too late November. And then in our first December multiple folio we
actually went overweight on e-commerce for the first time. OK but preferring the second and third name because there's
potential market share gain. But I would say 20. Twenty one is an era of new regulation 20 22 is enforcement. We would expect
enforcement to be quite strict. So it's really about execution by the individual companies that earnings. As you said you've
been looking at the whole overweight on E tailing but what which you change that call. This month though. What do you prefer. You
still kind of prefer that the top market leaders or do you kind of look at more second tier third tier now. I think one series
that regulation. Yeah. Then there's more constrained gross. And when we look at E tailing 11 Shery Ahn GMT in terms of our maybe
a 90 percent market share by the tops of it. So we gotta pay attention to who's gonna gain market share on the margin. And
then maybe have a little less regulatory scrutiny. So those are our guiding salts in putting together the JP Morgan China equity
our wonderful follow up.