At the opening of the Shenzhen Stock Exchange 2026 Global Investors Conference in Shenzhen on May 28, themed "Capital Markets and Innovative Growth – China's Opportunities Under the 16th Five-Year Plan," Stuart Rumble, Head of Asia Pacific Investments at Fidelity International, participated in a panel discussion on the logic of Chinese asset allocation in an era of "patient capital for long-term investment," balancing stability and ambition.
Stuart Rumble stated that Fidelity International is also a long-term investor, having been involved in China for over 20 years. Their current investments in China amount to USD 50 billion. They dedicate significant time engaging with companies and policymakers. As a long-term investor, their goal is to balance structural opportunities, particularly in new sectors where companies demonstrate strong cash flows, profitability, high management quality, and disciplined valuations.
He emphasized they do not wish to be swayed by headline hype surrounding new models or products. Instead, they focus on whether a business or technology will have solid fundamentals over the next five years, as new technologies often trigger significant market reactions. A colleague managing portfolios often remarks that markets can exaggerate the short-term prospects of technological innovations while underestimating or overlooking their long-term vision and value. This trend has been observed in past technologies like cloud computing and is now evident in AI. Sometimes, during trading, they see valuations detach from fundamentals. Their analysis involves deeply understanding a company to identify competitive and scale advantages, such as strong cash flow generation and robust shareholder returns. Currently, they are indeed finding value in AI, robotics, and other emerging, innovative fields.
Rumble further highlighted that this trend is gradually spreading across the entire infrastructure supply chain, not limited to just the AI theme or the semiconductor industry, indicating a broad scope of influence. They see considerable potential value across these supply chains, with some companies already achieving double-digit profit growth. Upstream and downstream enterprises in these innovative sectors, such as those related to energy and automation, offer better valuation and value, making them a key focus for identifying attractive entry points for investors.
He noted the benefit lies in balancing innovation with uncertainty, as China presents numerous opportunities, especially long-term structural ones, with promising talent, capital, and supply chains. There is no shortage of investment opportunities in China. However, they operate in a highly uncertain environment with geopolitical risks, supply chain volatility, and oil price fluctuations. At the portfolio level, as long-term investors, they actively manage their portfolios to ensure diversification, leveraging extensive experience to capture the value of long-term opportunities while managing risks.