Morgan Stanley has released a research report stating that, looking ahead to the end of the year, it continues to favor A-shares. The firm anticipates a moderate upside of approximately 5-10% for Chinese equities by year-end. Key drivers for this outlook include easing competition in the e-commerce sector, a more balanced index composition, and the increasing advantages seen in upstream and green technology sectors. The bank reaffirmed its year-end target for the Hang Seng Index at 27,500 points and its target for the MSCI China Index at 90 points. The report noted that Chinese stock markets have underperformed major Asian peers year-to-date. This is primarily attributed to sustained pressure on the heavyweight internet sector, influenced by the "ByteDance effect" and intensified e-commerce competition, which has overshadowed solid gains in sectors such as energy, materials, industrials, semiconductors, and healthcare. Due to index compilation rules, better-performing upstream and technology companies are underrepresented in the indices, leading to an underestimation of the overall performance of the Chinese stock market.