Mainland China investors have been witnessing impressive performances by Chinese stocks in 2025. One of the top performers in the CSI 300, which tracks the largest names on the Shanghai and Shenzhen stock exchanges, was Foxconn Industrial Internet. Listed in Shanghai, it saw a significant increase of 81% in the first six months of the year. Bank of America Securities has even given Foxconn Industrial Internet a buy rating and raised its price objective to 33 yuan ($4.54), showing confidence in its potential. With the anticipation of a better iPhone shipment cycle, analysts expect strong casing sales to support FII’s margin and earnings. Additionally, the AI server market remains strong, promising long-term upside potential for the company.
Another standout performer in the first half of 2025 was Avary Holding, which saw a jump of nearly 81%. With its three largest foreign institutional shareholders being Standard Chartered Bank, HSBC, and JPMorgan, the company has been attracting significant interest. Analysts expect Avary to benefit from the growing demand for artificial intelligence in mobile phones and PCs. The company’s strong positioning in high-end circuit boards and flexible printed circuit fields bodes well for its future growth. With expansions into new domains like automobiles and servers, Avary is establishing itself as a key player in the industry.
Zhongji Innolight ranked third in the CSI 300 performance in the first half of 2025, climbing 70%. Nomura has given Zhongji Innolight a buy rating after analysts met with the company and expressed confidence in its future prospects. With a focus on optical communication, Zhongji Innolight is expected to maintain its leading position in the global market. The company’s strong management team and solid relationships with top AI infrastructure customers globally are seen as key strengths that will drive its continued success.
While specific Chinese stocks are showing impressive growth, the mainland China stock market as a whole has been facing challenges. The CSI 300 index is down slightly year-to-date due to slower economic growth and uncertainty about future earnings. This contrasts with the Nasdaq Composite’s 18% gain in the U.S., highlighting the diverging trends in global markets. Over the past two years, the Chinese stock market has underperformed, making it difficult for local funds to outperform and leading to an influx of investments in index-tracking ETFs. Capital controls have restricted mainland China investors from accessing overseas markets, but financial institutions have found ways to enable their participation in global trends.
In response to the growing interest in international markets, financial institutions have introduced innovative investment products like ETFs to bridge the gap. For example, Invesco’s jointly managed ETF with Great Wall that tracks the Nasdaq has seen significant demand, trading at a premium to its net asset value. This popularity has led to trading suspensions on the Shenzhen Stock Exchange, where the ETF is listed, especially during recent weeks. Despite the challenges posed by capital controls, mainland China investors are finding ways to capitalize on the global market trends.
While the mainland China stock market faces macroeconomic challenges and struggles to match the performance of U.S. stocks, individual Chinese companies are showing strong growth potential. Investments in companies like Foxconn Industrial Internet, Avary Holding, and Zhongji Innolight reflect the underlying strength of the Chinese economy and its ability to innovate in key sectors. By navigating the complexities of the global market and utilizing new investment opportunities like ETFs, mainland China investors can continue to participate in and benefit from international growth trends.