該行指，鑑於中國互聯網行業過去幾周消息面所產生的波動，令投資者專注於管理短期風險和倉位屬可以理解的，雖然該行相信行業基本面最終將佔估值水平的上風，並引導股價接近其長期均衡水平。但由於監管及中概股潛在於美國退市所帶來的不利因素仍然很大，該行認為投資者需要補充其以基本面為重點的估值方法(如SOTP(分類加總估值法)和/或PEG)，對政策和監管變量有明確的看法，以更好地評估風險與回報。Goldman Sachs issued a Report on China's market strategy. Under the influence of tightening regulations on the industry, potential delisting risks of Chinese stocks in the United States, rising interest prospects in the United States, the premium reflecting risks in the valuation of Chinese assets, and economic growth, China's technology and Internet stocks have fallen by about 60% since their record highs 14 months ago.
A loss of us $2 trillion (HK $15.69 trillion) is equivalent to 11% of GDP in 2021.
Chinese Internet stocks have rallied 18 percent from their March 15 bottom on optimism about share buybacks and hopes of a possible U.S. delisting or resolution, the bank said. It refers to China Internet stock valuation at present quite dynamic p/e ratio of 0.7 times, 17.4 times earnings, according to the p/e valuations 33% discount to dispute their U.S. counterparts.
Goldman sachs says valuation models for Chinese Internet shares suggest that current valuations already reflect expectations of a significant decline in economic profits.
The bank said it was understandable for investors to focus on managing short-term risk and positioning given the volatility generated by news in China's Internet sector over the past few weeks, although it believed industry fundamentals would ultimately prevail over valuation levels and guide share prices closer to their long-term equilibrium. However, as regulatory and potential DEListing of Chinese concept stocks in the US remains significant, the bank believes investors need to supplement their fundamental-focused valuation methods (such as SOTP and/or PEG) with a clear view of policy and regulatory variables to better assess risk and reward.
Goldman sachs said it sees a 50 percent upside in current share prices and fair valuation forecasts based on a "base" scenario of return on equity and discount over Equity (COE) for China's Internet sector. For reference, the bank's Internet research team's target price for the China Internet companies it covers implies an average of 82 per cent upside over the next 12 months.
