Schroders global, head of diversified asset management in the Asia-Pacific region, Yu Xueyu, issued a report pointing out that although the valuation of US stocks may appear high, there are several positive factors in fundamentals: as the S&P 500 constituents enter the peak earnings period, almost 80% of companies have reported profit growth exceeding market expectations; 60% of companies also exceeded revenue estimates; the US nominal economic growth remains robust; strong consumption data continues to benefit corporate earnings and performance. Yu Xueyu continued to say that although the overall valuation of US stocks seems high, the continuous growth in corporate sales revenue and profit margins, along with improvements in the macroeconomic environment, will continue to support the stock market. A reasonable adjustment in the stock market in April 2024 prompted the company to increase its stock holdings. The seven technology giants in the US stock market (M7) have benefited from the optimistic expectations of the financial market for the development of artificial intelligence (AI) business, leading the US stock market since last year. Schroders global investment expects that by 2024, the gap between M7 and other stocks globally will gradually narrow, but in a positive way. Besides changes in relative growth rates, the narrowing gap may help drive dominant technology themes to continue expanding in the financial market. The report points out that there are divergences in the global economy, coupled with varying corporate profit performances among regions, which continue to support diversified investment allocations. Yu Xueyu stated that based on the positive outlook for consumer prospects in Europe, they have increased holdings in European stocks. He also identified some undervalued opportunities for corporate profit growth in the European stock market. Schroders global investment also sees potential in some attractive large-cap and industrial stocks in Japan. Yu Xueyu pointed out that Japan is benefiting this year from the continued implementation of loose monetary policy, as well as the improvement in corporate governance bringing higher capital allocation and shareholder returns, leading to a strong economic foundation and sustained growth in corporate profits. Yu Xueyu also mentioned the possibility of Japan's economy entering a mild inflation cycle where wages and prices form a positive cycle. He stated that by the second quarter of 2024, as Japanese companies have the ability to pass on rising costs to final product prices, corporate profits could reach new highs, potentially even contributing to wage growth. From a thematic investment perspective, Yu Xueyu believes that two themes are worth watching this year: commodities and energy stocks still have attractiveness as they can provide effective hedging against the current tense geopolitical situations in the Middle East and Ukraine. The Schroders global investment global resources stock team has pointed out that AI brings significant investment opportunities to the energy industry. As AI technology advances, the pace of data center construction and power consumption will continue to increase, with the key requirement being the simultaneous expansion of electricity production and transmission efficiency. Citing data from Thunder Said Energy up to April 2024, the report indicates that from 2010 to 2023, the compounded annual growth rate of electricity demand related to data centers was 14%, while the annual growth rate of global total electricity demand during the same period was only 2.5%. Amid ongoing concerns about geopolitical situations, Yu Xueyu stated that the company will prioritize yield after adjusting for credit quality and increase holdings in investment market areas that are believed to effectively diversify risks in the future.