Global Capital Massive Shift! Foreign investment giants increase holdings in A-shares, Goldman Sachs and Morgan Stanley focus on these core assets

Ask AI · What differences exist in investment strategies between Western and Middle Eastern institutions when investing in China’s A-share market?

21st Century Business Herald reporter Yi Yan-jun

Repositioning moves by overseas institutional investors such as Goldman Sachs, Morgan Stanley, JPMorgan, and Abu Dhabi Investment Authority during the fourth quarter of 2025 are gradually becoming clear.

Based on Wind data compiled by 21st Century Business Herald, as of the evening of March 29, more than 700 A-share listed companies had already released their 2025 annual reports. Among them, the top ten shareholders of more than 120 A-share companies include QFIIs, involving about 24 foreign institutions.

Among these more than 120 companies, more than 80% of companies received new QFII positions or increased holdings in the fourth quarter of last year (calculated as consolidated across different institutions; the same applies below). Around 10% of companies saw QFII reductions, while the number of QFII shares held by other companies remained the same as in the third quarter of 2025.

In terms of the direction of increases, QFIIs show strong favor toward the high-end manufacturing and hard-tech sectors. Meanwhile, “sector-level leading companies, earnings certainty, and a margin of safety” are also the “keywords” in QFII repositioning.

The Research Department of China International Capital Corporation Limited (CICC) expects that, as global geopolitical risks become more frequent, the safety attributes of China’s assets will increasingly attract capital, which could help drive a long bull market and a gradual bull market in A shares.

The reporter, after combing through the data that has already been released, noticed that in the fourth quarter of last year, at least 90 individual stocks received new QFII heavy positions. These stocks are mostly small- and mid-cap companies, mainly covering sectors such as technology, new energy, and consumer.

Among them, there are 7 A-share companies with new QFII heavy positions exceeding 10 million shares, including: Jingliang Holding, Sanhuan Group, Fenglin Group, Yunda Shares, Baosheng Shares, Moen Electrical, and Hengbang Shares.

Specifically, according to Wind statistics, in the fourth quarter of last year, food processor Jingliang Holding received new heavy positions from four overseas institutions, including Goldman Sachs Group and UBS Group (U.B.S.); the total shareholding was about 12.51 million shares. Sanhuan Group, which engages in R&D, production, and sales of electronic components and their basic materials, received a new heavy position from Morgan Stanley International plc, holding more than 14.52 million shares. Fenglin Group, a producer of particleboard and fiberboard, received new heavy positions from Morgan Stanley and Goldman Sachs Group, with shareholdings of 10.85 26 million shares and 6.24 75 million shares, respectively; however, the company was reduced by 0.6262 million shares by Barclays Bank PLC.

Yunda Shares, a wind power concept stock, received new heavy positions from the Kuwait Investment Authority and Macau Monetary Authority, with a total holding of 12.75 59 million shares. Baosheng Shares, a state-owned large holding enterprise in the wire and cable industry, also received new heavy positions from UBS Group and Morgan Stanley, with a total holding of about 12.22 60 million shares. Moen Electrical, in the wire and cable industry, received new heavy positions from four institutions including Goldman Sachs Group and Morgan Stanley, with a total holding of about 12.32 million shares; however, JPMorgan Securities reduced its holdings by about 1.27 million shares. Hengbang Shares, in the precious metals industry, received a new heavy position from Morgan Stanley of about 10.51 million shares.

Individual stocks with relatively higher numbers of new QFII heavy positions in the fourth quarter of 2025 (selected); data source: Wind

At the same time, there are 5 individual stocks whose number of newly added QFII heavy positions ranges from 6 million to 9 million shares, including: China National Fisheries Industry (China Fisheries), Yuan Zu Shares, Bomai Ke, Yanjiang Shares, and Xinnuowei.

Specifically, the far-sea fishing company China National Fisheries Industry (China Fisheries) received new heavy positions from four institutions, including Morgan Stanley and Barclays Bank, with a total holding of about 8.93 million shares; Yuan Zu Shares, which engages in food-related business, received new heavy positions from five institutions including Goldman Sachs International, JPMorgan Securities LLC, and Banque de Paris et des Pays-Bas, with a total holding of about 7.81 million shares.

Bomai Ke, an EPC services company, received new heavy positions from Goldman Sachs Group and Merrill Lynch International; these two institutions jointly hold nearly 7.32 million shares of Bomai Ke. Yanjiang Shares, which supplies surface-layer materials for disposable hygiene products, received new heavy positions from CITIC Securities Asset Management (Hong Kong) Limited—Client Funds and Morgan Stanley, with holdings of about 4.37 million shares and 2.53 million shares, respectively. Xinnuowei, a healthcare food concept stock, received a new heavy position from UBS Group, holding nearly 6.88 million shares.

In addition, individual stocks with newly added QFII heavy positions between 5 million and 5.6 million shares include: Sentry Microelectronics, Conch New Materials, Zhongxing Edible Bacteria, Bayi Steel, Hualink Cables, and others. In comparison, Blue Lace Technology received a new heavy position from Goldman Sachs International, with shareholding of nearly 5.99 million shares.

Overall, “stocks that received QFII increases generally show the following characteristics: first, they mostly come from the high-end manufacturing and hard-tech tracks, such as semiconductors and electrical equipment—aligning with the direction of industrial upgrading and domestication; second, they are often sector-level leaders with technical barriers and pricing power, with higher earnings certainty; third, valuations are mostly at historical or industry mid-to-low levels, providing sufficient margin of safety.” Fangfang Zeng of the public fund product operations team at Pai Pai Wang Wealth analyzed for reporters.

Some individual stocks may already have delivered solid investment returns for foreign institutions. According to Wind data, as of March 27, since the fourth quarter of last year, Sentry Microelectronics, Yanjiang Shares, Zhongxing Edible Bacteria, and Baosheng Shares increased by 84.5%, 172.1%, 52.8%, and 27.3%, respectively.

In terms of the direction of reductions, as of now, QFII reductions are concentrated in industries such as electrical equipment, hardware equipment, and pharmaceutical and biological products. In some cases, partial selling may be driven by considerations of taking profits at a certain stage.

For example, in the fourth quarter of last year, GIC PRIVATE LIMITED reduced its holdings by about 3.56 million shares of Huaming Equipment.

Wind data shows that between July 1 and December 31, 2025, Huaming Equipment rose by 54.45%. And GIC PRIVATE LIMITED has appeared for eight consecutive quarters on the list of Huaming Equipment’s top ten circulating shareholders. After the reduction in the fourth quarter of last year, GIC PRIVATE LIMITED still held more than 4.39 million shares of Huaming Equipment.

At the institutional level, there are clear differences in holding preferences between Western foreign investment banks and Middle Eastern sovereign funds.

Based on currently disclosed data, on the one hand, in the fourth quarter of last year, Barclays Bank, UBS Group, Morgan Stanley, JPMorgan Securities, and Goldman Sachs Group all showed a trend of increasing their A-share holdings. Following a “scattershot” investment logic, they newly added heavy positions in more than 10 individual stocks each.

For example, based on currently published data, in the fourth quarter of 2025, UBS Group newly added heavy positions in more than 30 A-share listed companies, including Xinnuowei, Baosheng Shares, and Bayi Steel, among others; the average number of shares held was around 2 million shares.

On the other hand, Middle Eastern sovereign funds represented by Abu Dhabi Investment Authority tend to hold A-share listed companies for the long term, and they conduct swing trades during the holding period.

For example, in the fourth quarter of 2025, Abu Dhabi Investment Authority further increased its holdings of Baofeng Energy, bringing its total position to 44.81 million shares. Previously, Abu Dhabi Investment Authority had increased its holdings of Baofeng Energy for four consecutive quarters.

However, when selecting individual stocks, foreign institutions also have consistency in their judgments.

Besides Moen Electrical, China National Fisheries Industry (China Fisheries), and Yuan Zu Shares mentioned earlier, multiple other A-share companies are simultaneously held as heavy positions by more than three foreign institutions.

For example, in the fourth quarter of last year, Dayou Shares, which focuses on the two major business areas of “new energy + automobiles” and “semiconductor memory + intelligent terminals,” was not only held by Barclays Bank for 0.8359 million shares, but also received new heavy positions from UBS Group, JPMorgan Securities, Banque de Paris et des Pays-Bas, and Morgan Stanley. As of the end of the fourth quarter of 2025, the total shareholdings by the five institutions above in Dayou Shares were about 5.41 million shares.

Zeng Fangfang believes that the fact that some individual stocks are held jointly by multiple QFIIs shows that their investment value has formed a certain market consensus.

Based on observing the market value of holdings, in China’s A-share market, QFIIs’ key deployment directions still revolve around core assets and new quality productive forces.

Among the companies that have already released their 2025 annual reports, there are more than 30 individual stocks whose QFII holding market value exceeds 100 million yuan (calculated by consolidating across different institutions).

Individual stocks with higher QFII holding market values (as of the end of the fourth quarter of 2025); data source: Wind

Among them, according to Wind statistics, as of the end of the fourth quarter last year, Morgan Stanley held a market value of about 660 million yuan in Sanhuan Group; Abu Dhabi Investment Authority held market values of about 420 million yuan and 880 million yuan in Beixin Construction Materials and Baofeng Energy, respectively; UBS Group held a market value of about 370 million yuan in Demingli; and Goldman Sachs International held a market value of about 310 million yuan in Chuangxie Data.

And these individual stocks are mostly leading companies in their respective industries.

For example, Baofeng Energy is a leading company in the full industrial chain of high-end coal-based new materials, committed to producing high-end chemical products by replacing oil with coal and replacing fossil energy with new energy. Beixin Construction Materials is a platform for green building new materials within China Building Materials Group, a Fortune 500 company. Demingli focuses on innovative R&D of storage control chips and solutions; it is a national high-tech enterprise and a key “little giant” enterprise specialized in and serving niche markets.

Zeng Fangfang analyzes that QFIIs’ long-term investment logic in A shares remains stable: they consistently adhere to the core of value investing, prefer companies with relatively stable performance, strong cash flows, and long-term growth potential, and they usually adopt longer holding periods.

At the same time, “QFII’s allocation structure dynamically evolves along with China’s economic transition: in the early stage, it focused on traditional core assets such as finance and consumption; in recent years, it has noticeably shifted toward ‘new quality productive forces’ areas such as technology manufacturing and pharmaceutical and biological products, closely following the direction of national industrial policies.” Zeng Fangfang said.

In Zeng Fangfang’s view, as overseas long-term capital, QFIIs’ allocation focus has shifted from traditional blue chips to sector-level manufacturing segments. This reflects international capital’s recognition of China’s industrial upgrading trend and helps further bring A-share investment logic back to industry fundamentals and value investing.

In the first quarter of 2026, continued geopolitical tension in the Middle East has led to severe turbulence in global financial markets. Against this backdrop, foreign institutions still look favorably on the allocation value of China’s assets.

Timothy Moe, Chief Equity Strategist for Goldman Sachs Asia Pacific, said in a recent media interview that downside risks for the Chinese market are relatively limited at present, and there remains upside room. “The risk-reward ratio of the Chinese market is attractive.” The earlier, thorough valuation adjustments, relatively light foreign holdings, and forward-looking arrangements related to an energy security strategy have become defensive features of the Chinese market.

Meanwhile, Moe expects that AI will boost corporate earnings through ways such as improving production efficiency, lowering labor costs, and creating new business opportunities. The constituents of the MSCI China Index and the overall earnings growth rate in A shares are expected to reach double-digit levels. Looking ahead, Moe believes that the HALO (heavy assets, low淘汰) investment theme has staying power and could become an important direction for capital allocation.

In addition, from the perspective of “analyzing Chinese assets using global industry logic,” Liu Song, Chairman of LoboMai Fund Management (China) Co., Ltd., pointed out that “the independence of Chinese assets is no longer isolated, but exists as an indispensable ‘stabilizer’ in the global industrial chain.” Taking the AI technology track as an example, in reality the world is forming two relatively independent sets of ecosystems.

“By concentrating global capital in 2025 on U.S. AI computing power and the model layer, the allocation proportion of foreign capital to China’s AI ecosystem has been at a historical low. Entering 2026, as China makes rapid breakthroughs in the ‘technology self-reliance’ area, this ‘allocation vacuum’ is triggering a strong demand for catch-up.” Liu Song said.

At a deeper level, as global asset pricing logic undergoes reshaping, the “safety premium” of Chinese assets is being given attention by all parties.

CICC’s Research Department believes that as the old international order loosens and the probability of geopolitical risks increases, the logic of safe assets has already shifted. Specifically, assets that can enhance a country’s ability to withstand geopolitical risks are the safe assets of today.

In terms of the market, CICC’s Research Department observed that over the past year, capital began to rebalance across countries, styles, and asset classes. Emerging markets and European stock markets hit new highs, while the performance of U.S. stocks was relatively weaker. Within U.S. stocks, Nasdaq’s momentum led by technology gradually weakened, while the Dow, dominated by a cyclical and value style, performed relatively better. By sector, raw materials, energy, industrials, and defense aerospace generally led the market, while information technology began to tire.

Across asset classes, capital has increased allocations to commodities, and gold, crude oil, and agricultural products have all achieved relatively good performance. The traditional dollar safe-haven logic has shown some loosening. After the U.S.-Iran conflict, the 10-year U.S. Treasury yield rose sharply, but the upward momentum of the U.S. dollar has been comparatively weak.

CICC’s Research Department judges that over the medium to long term, the inevitability of U.S. policy will continue to drive a massive global reallocation of assets. Focusing on equity assets, it expects that as geopolitical risks become more frequent, the safety attributes of China’s assets will increasingly win capital preference, which could help support a long bull market and a gradual bull market in A shares.