Junli Henderson believes that by 2026, the AI industry in China is entering a crucial stage of development. Benefiting from large-scale promotion activities, rapid breakthroughs in agentic models, and more practical funding and commercialization strategies, China will shift from "catching up" to "competing," and even lead the world in some areas, with a lower risk of overcapacity compared to the United States. When AI capabilities truly land on the application level and generate sustainable cash flow, the entire AI ecosystem will bring about broader investment opportunities. Junli Henderson believes that China has four major competitive advantages in the AI competition: first, with powerful open-source models, Chinese companies have built a huge global user community. Thousands of developers worldwide are rapidly testing, patching, and fine-tuning, making it difficult for any single closed laboratory to compete. Second, compared to American companies, China has relatively limited sources of funding and advanced chip supply, making Chinese AI companies more focused on monetization, making the entire AI ecosystem more practical. Third, the government is vigorously promoting infrastructure construction, especially in building data centers in western China, which has abundant solar and wind energy resources. Finally, due to the tightening of the Chinese capital market in recent years, fund flows are more cautious, and the risk of overcapacity is significantly lower compared to the United States. The bank said that with the Chinese government focusing on using AI to enhance productivity, loose monetary policy, easing US-China relations, and favorable exchange rate trends, more and more local and international investors are beginning to view China's long-term prospects in a more positive light, providing a favorable environment for selecting stocks.