Against the backdrop of restructuring global technology and consumption patterns, mutual funds are now focusing on "global comparative advantages" in their overseas expansion strategies, with pan-entertainment quietly becoming a major allocation target. In recent years, "global comparative advantage" has emerged as a key term in investment research discussions among prominent fund managers, and many large mutual fund companies have actively developed sector funds centered on this concept to identify industries capable of disruptive growth abroad. The pan-entertainment sector, leveraging engineering talent, advanced supply chains, and mature domestic business models, has seen accelerated revenue growth overseas, making it a key area for fund managers to track and position in the AI era.
Funds are increasingly embracing the concept of "global comparative advantage," which has gained significant recognition within the mutual fund industry as a crucial investment theme and a guiding principle for stock selection and strategy formulation. Key figures such as Liu Gesong of GF Fund, Yang Delong of Qianhai Kaiyuan Fund, and former star manager Lin Sen of E Fund have explicitly incorporated "global comparative advantage" into their core investment frameworks. They emphasize selecting stocks based on China's competitive strengths within global supply chains, focusing on companies with technological, cost, and operational advantages that enable overseas expansion and disruptive potential.
In terms of product offerings, firms including Southern Fund, Qianhai Kaiyuan Fund, SDIC UBS Fund, and Essence Fund have launched sector funds themed around "comparative advantage," targeting Chinese industries with core global competitiveness. With the support of AI technology and the growing narrative of Chinese brands, the pan-entertainment sector—previously overlooked and under-allocated by institutions—is now emerging as a new highlight in fund portfolios under the "global comparative advantage" framework.
For instance, pan-entertainment companies such as POP MART, Buluke, XD Inc., Meitu, and Chizicheng Technology, which are heavily covered by mutual funds, have achieved robust growth in overseas markets thanks to mature cost control systems and AI-driven enhancements. Buluke, a major holding of BOC Fund, saw its overseas revenue surge by 3.97 times year-on-year in 2025 following expansions into Indonesia and North America, effectively offsetting a domestic revenue growth of approximately 19%. Similarly, XD Inc., a key holding of China Europe Fund, witnessed its overseas revenue share rise from around 20% of total annual revenue when its stock price fell below HK$8 per share to nearly 50% as the price climbed to HK$70 per share, highlighting overseas demand as a key driver of performance.
POP MART, heavily weighted by E Fund’s Zhang Kun, and Meitu, a major holding of Southern Fund’s Shi Bo, also achieved significant turnarounds in performance and stock prices through overseas revenue expansion. By the end of 2022, POP MART’s market capitalization had dropped below HK$20 billion, with overseas revenue accounting for less than 10%; today, its market cap exceeds HK$280 billion, with overseas revenue contributing over 40% and becoming a core profit source. Meitu has attracted clustered investments from several star fund managers, largely due to the gradual realization of its "global comparative advantage" since 2023, leading to a rapid increase in overseas revenue share.
Guided by this strategy, E Fund has also invested in Miniso, which is transitioning into潮玩IP, while several QDII funds under Southern Fund have heavily weighted Chizicheng Technology. China Europe Fund holds positions in China Literature, and GF Fund has allocated to Damai Entertainment, all reflecting the application of the "global comparative advantage" concept in portfolio construction. Miniso’s overseas pan-entertainment business achieved rapid growth in 2025, while Chizicheng Technology has successfully replicated domestic short-video and social entertainment models in the Middle East, North America, and Southeast Asia. The company forecasts its 2025 net profit attributable to shareholders to exceed RMB 900 million, a year-on-year increase of no less than 87%, making it the third-largest holding in Southern Hong Kong Growth QDII Fund.
High gross margins have further heightened fund interest in the pan-entertainment sector. Beyond the visible success of several industry giants, fund managers are particularly drawn to China’s engineering talent, mature business model exports, and efficient cost control, which collectively translate into more competitive profitability. Hu Yibin, manager of Hua An Media Internet Fund, notes that one core logic behind China’s pan-entertainment expansion lies in the country’s innovation in value-added internet services, where mature business models in online gaming, live streaming, short videos, and online literature have established solid user payment bases and operational experience.
With the ongoing release of engineering talent红利, many overseas ventures are still in rapid expansion phases. Although gross margins may be temporarily subdued, they are expected to converge with international leaders as technological advantages solidify and global market share increases, potentially unlocking "Davis double" opportunities. A fund manager in South China highlighted that short-video content, which first gained traction domestically, is now expanding globally. Practices by companies like ByteDance, POP MART, and Kuaishou demonstrate that, leveraging "global comparative advantages," the pan-entertainment sector can produce industry giants. China’s strong engineering teams, competitive cost structures, and pricing systems—combined with AI enhancements in supply chain and模具R&D—position the country to potentially rival global leaders like Bandai, Sanrio, and Hasbro in the entertainment IP economy.
Technological and cost advantages have consistently benefited the overseas expansion of pan-entertainment. Yalla Group, covered by QDII funds in U.S. markets, has become a leading online social entertainment platform in the Middle East and North Africa by leveraging人力成本and AI tools to improve user payment conversion, achieving a net profit exceeding RMB 1 billion in 2025. Similarly, Joyy Inc., another QDII focus, consistently ranks among the top Chinese app developers in overseas revenue, reporting revenue approaching RMB 15 billion in 2025 driven by efficient expansion supported by technology and cost advantages.
Many fund managers believe the pan-entertainment sector is at an inflection point for value re-rating, with recent adjustments in Hong Kong stocks offering opportunities for southbound capital. Qu Shaojie, Deputy General Manager of the International Business Department at Great Wall Fund, notes that Hong Kong markets show clear structural divergence rather than broad weakness. While tech sector weightings have dragged down overall portfolio performance in 2026 due to significant corrections, non-tech oriented Hong Kong funds have generally delivered solid returns, with value stocks experiencing a four-year slow bull market. Fundamentals in pan-entertainment areas like advertising, e-commerce, and gaming remain strong, supported by steady revenue and profit growth, ongoing AI applications, and clear medium-to-long-term logic despite short-term volatility.
Other managers point out that rising overseas revenue shares among pan-IP and pan-entertainment companies are generating robust cash flows and enhancing growth visibility. These firms, capitalizing on domestic engineering talent,完善的供应链, and technological edges, are accelerating overseas penetration. As user bases expand and payment rates rise, second growth curves are expected to unlock substantial valuation upside. Xiong Xiaoya, manager of Southern Hong Kong Growth Fund, which heavily invests in pan-entertainment, emphasized China’s growing strengths in engineering implementation and rapid product iteration. Continuous innovation in AI large models and software-hardware integration represents a long-term competitive edge. With ample room for growth in domestic service consumption, her team will focus on opportunities arising from shifts in consumer industry structures, seeking high-quality companies in experiential and value-for-money consumption segments.