T. Rowe Price's China New Horizon Stock Strategy Fund Manager Zheng Wenli recently shared his latest views on potential investment opportunities in the Chinese stock market. The recent rise of AI agents has significantly boosted the use of tokens, accelerating the growth of model suppliers and cloud service companies, forming a positive cycle that helps improve the sustainability of AI investments. Through industry chain research, it was found that the current AI upcycle is expected to continue for the next one to two years. T. Rowe Price mentioned that the most attractive investment opportunities in the artificial intelligence industry chain still focus on the chip/hardware and energy-related sectors. The business models in these areas are relatively clear, with high profitability visibility and valuations that provide some support. Based on this, the focus is on two types of opportunities. The first type is in niche areas being driven by continuous upgrades, where products see rapid value growth and have a competitive advantage, including optical components, power supply, printed circuit boards (PCBs), and chip testing, which are expected to outperform overall AI investments in the next one to two years. The second type is in segments with limited supply or bottlenecks, where companies typically have strong pricing power and room for profit expansion, such as semiconductor substrates, PCB materials, and power generation equipment. However, these opportunities require more flexible position management. Regarding technological development, T. Rowe Price stated that besides continuing to be bullish on optical and power supply companies, the proliferation of AI agents is also driving an accelerated demand for server CPUs. Additionally, clean rooms may become a key bottleneck in the next two to three years. Continuously assessing the risk-return of AI-related stock investments from two core dimensions: the current position in the cycle and the technological development path - that is, which parts of the AI ecosystem are more likely to benefit in the next stage. These judgments rely on in-depth research of the entire industry chain, including model developers, startups, cloud giants, chip designers, and hardware supply chains, and integrate different information through a global research platform to identify more differentiated investment opportunities. T. Rowe Price pointed out that consumer performance has been relatively weak in recent years, but there is clear differentiation within the sector. Lower-tier cities have shown more resilience than first-tier cities, and there are significant differences between different age groups: middle-class consumers in first-tier cities have been affected by a weak property market, while young people and retirees show strong demand in their respective preferred consumption areas. Although the overall performance of traditional consumer sectors has been average, there are still structural opportunities in the market, including companies benefiting from high-growth sectors (such as tourism, entertainment, and IP-related consumption) and enterprises expanding market share through innovative business models (such as discount retail and new beverage brands). In the consumer sector, T. Rowe Price mentioned primarily focusing on two types of investment opportunities. The first type is companies with platform attributes that benefit from structural growth trends, have scale and supply chain advantages, and can withstand cycles, with growth sources including store expansion and same-store sales growth, such as mall operators, hotels, and new beverage companies. The second type is companies driven by product and brand momentum, which can achieve rapid growth in favorable cycles but have lower sustainability, so flexible and proactive stock selection is key.