Global renowned index provider MSCI recently announced its August 2025 index review results. These adjustments will take effect after market close on August 26th. Among MSCI's series of indices, those involving A-shares include the MSCI China Index and MSCI China A Onshore Index. The MSCI China Index deserves particular attention, as stocks included in this index are simultaneously incorporated into the MSCI Emerging Markets Index, attracting substantial global passive fund tracking.

**MSCI China Index Adjustment Details**

The MSCI China Index will add 14 new constituents, including 9 Hong Kong-listed companies: 3SBIO (01530), CITIC Financial Assets (02799), Horizon Robotics (09660), GDS-SW (09698), Lao Pu Gold (06181), Meitu (01357), NETEASE MUSIC (09899), SKB BIO-B (06990), and WuXi AppTec (02268). This reflects the recent strong performance of Hong Kong's technology, innovative drug, and new consumption sectors, with these listed companies expected to attract additional incremental funding.

Additionally, 5 A-share companies were added: Compass (300803.SZ), China CITIC Bank (601998.SH), Giant Network (002558.SZ), Allist Pharma (688578.SH), and King Board Holdings (603228.SH).

From a market performance perspective, the 5 newly included A-share stocks have shown impressive gains this year. As of August 22nd close, Giant Network surged 141% year-to-date, King Board Holdings rose 100%, while China CITIC Bank, the largest market cap A-share addition, gained 17% for the year.

MSCI indices wield significant influence in international capital markets. The MSCI China Index, compiled by MSCI to track Chinese concept stocks, serves as a benchmark for global investors in Chinese assets. Since this index is embedded within the MSCI Emerging Markets Index, inclusion in the MSCI China Index means entry into the MSCI Global Standard Index series.

Market participants widely anticipate passive fund effects from the August 26th post-close implementation. As the MSCI China Index is simultaneously included in the MSCI Emerging Markets Index, new constituents may see concentrated allocation from overseas index funds after market close, potentially leading to increased trading volume during closing auctions.

**Foreign Institutions Collectively Bullish**

Alongside MSCI index adjustments, international rating agencies and foreign investment giants have released positive signals regarding Chinese assets. On August 7th, S&P Global Ratings maintained China's sovereign credit rating at "A+" with a "stable" outlook, highly recognizing China's economic growth resilience and debt management effectiveness.

As early as May this year, Nomura Securities upgraded China's equity market rating from "neutral" to "tactical overweight," optimistic about the development potential of technology sectors including AI, electric vehicles, and intelligent robotics.

Goldman Sachs maintains an "overweight" rating on Chinese equities, raising the MSCI China Index target to 84 points and the CSI 300 Index target to 4600 points, representing potential upside of approximately 11% and 17% respectively.

Under the dual drivers of fundamentals and policy support, foreign capital expresses more optimistic allocation intentions toward Chinese assets. Institutional expectations for China's macroeconomic growth prospects are also being revised upward—international institutions generally raised their forecasts for China's 2025 economic growth rate, believing both domestic demand and export resilience exceed previous expectations.

Foreign institutions are gradually shifting from "wait-and-see" to "deployment," providing trading momentum and price support during market uptrends. Neuberger Berman emphasized in its August market outlook: "Medium-term, Chinese assets remain globally underallocated, while new growth drivers (high-end manufacturing, digital economy, green transition) continue emerging. Policymakers consistently roll out supportive policies for capital market high-quality development, combined with loose liquidity, continuously enhancing A-shares' attractiveness to foreign and long-term capital."

**Concept Stocks:**

**3SBIO (01530)**: Up over 67% since June. 3SBIO announced that all subscription conditions were met and completed on August 1st. A total of 31.1425 million subscription shares were successfully issued to Pfizer at HK$25.2055 per share, generating net proceeds of approximately HK$785 million, with 80% allocated to global R&D expansion of clinical and pre-clinical pipeline projects and production facility improvements, and 20% for other general corporate purposes.

**NETEASE MUSIC (09899)**: Up over 35% since June. In late August, CMB International Securities lowered revenue forecasts by 4-5% for fiscal years 2025 and 2026 due to expected weakening social entertainment business, but raised core operating profit forecasts by 25% and 23% respectively, benefiting from cost control-driven margin improvements. Based on sum-of-the-parts valuation, the target price was significantly raised from HK$208 to HK$330, maintaining a "buy" rating.

**SKB BIO-B (06990)**: Surged 46% since June. In late August, China Merchants Bank International expressed confidence in SKB264's global development, raising the target price from HK$299.93 to HK$498.55 based on discounted cash flow valuation, maintaining a "buy" rating. The company reported first-half revenue of RMB 950 million, with product sales reaching RMB 310 million, of which SKB264 contributed RMB 302 million, equivalent to 34% of full-year forecasts.

**WuXi AppTec (02268)**: Surged over 44% since June. In late August, CLSA maintained a long-term positive view, reiterating an "outperform" rating with target price raised from HK$47.3 to HK$70.7, raising 2025-2027 revenue and net profit forecasts by 7-8% and 13-17% respectively.

**Meitu (01357)**: Surged over 61% since June. Recently released interim results showed revenue of RMB 1.821 billion for the six months ended June 30, 2025, up 12.34% year-over-year; gross profit of RMB 1.34 billion, up 27.26%; profit attributable to shareholders of RMB 397 million, up 30.84%. The company declared an interim dividend of HK$0.045 per ordinary share.

**Horizon Robotics (09660)**: In late July, CLSA raised full-year R&D expense forecasts from RMB 4 billion to RMB 4.5 billion as the company increases funding and accelerates autonomous driving R&D, with target price of HK$10.5 and "outperform" rating. Channel sources indicate rising autonomous driving sales in June, with first-half product revenue expected to nearly triple year-over-year.

**GDS-SW (09698)**: Reported first-half 2025 net revenue of approximately RMB 5.623 billion, up 12.2% year-over-year; gross profit of approximately RMB 1.334 billion, up 22.71%; net profit attributable to ordinary shareholders of approximately RMB 664 million, turning from loss to profit year-over-year.