Staffers remote control robotics to demonstrate working on power grid control units during a media tour at Guangdong Power Grid Robotics Laboratory in Guangzhou, Guangdong Province, April 16. AP-Yonhap
Korean investors have increased their exposure to China’s technology and advanced manufacturing sectors during a recent pullback in mainland China stocks, suggesting continued appetite for artificial intelligence (AI) and hard-tech themes despite broader market weakness, according to market analysts on Monday.
They turned net buyers of several China-focused exchange-traded funds (ETFs) and technology stocks on Thursday, when mainland Chinese markets saw a notable decline. The buying was concentrated in products tracking robotics, semiconductors power-grid equipment and electronics supply chains. The investors also accumulated ETFs tracking China’s technology and innovation themes, including products tied to China’s STAR Market.
They bought a net $3.21 million worth of the China Asset Management Co Robot ETF during the market sell-off, according to data from SEIBro, a portal maintained by the Korea Securities Depository.
That was followed by Shenzhen Fastprint Circuit Tech, a leading Chinese printed circuit board maker, with net purchases of $2.73 million, and Guangdong Fenghua Advanced Technology, one of China’s leading electronic component makers, with net purchases of $2.72 million.
They also bought a net of $1.15 million of the ChinaAMC Grid Equipment Thematic ETF, which tracks Chinese companies involved in power-grid infrastructure and related equipment manufacturing.
The buying spree came when the Chinese A-share market saw a broad pullback Thursday, when the CSI 300 Index, a gauge of major mainland Chinese stocks, fell 1.4 percent, while the Shanghai Composite Index slid 2 percent.
“Korean investors have built strong confidence in the technology sector after years of gains in their domestic market,” said Kenny Ng, an equity strategist at Everbright Securities International.
“Investors who generated solid returns from Korean technology stocks are now looking for similar opportunities overseas,” he said. “Relatively lower valuations in Chinese technology companies have also made the sector more attractive.”
Many of the stocks they bought rebounded a day later. Guangdong Fenghua jumped 10 percent to hit its daily limit on Friday, before extending its gains by nearly 10 percent on Monday.
The buying trend also aligns with growing optimism around China’s markets by global institutions. Morgan Stanley strategists led by Laura Wang said in a May 13 report that they expected earnings prospects for Chinese equities to improve and preferred the Chinese onshore market over the offshore market, citing the greater concentration of high-end manufacturing and hard-technology companies.
The bank also forecast moderate upside for Chinese equities through the second quarter of 2027, with targets of 5,400 for the CSI 300 and 91 for the MSCI China index, implying potential gains of around 11 percent and 12 percent, respectively.
