China halfway through half of the cycle of correction: Fidelity

China has gone through half of the cycle of correction in the equity market and the regulatory cycle started from March 2021 is expected to end no later than one year, said financial service firm Fidelity.

Victoria Mio, director of Asian equities at the firm, said the valuation of mainland stocks is "very cheap" right now and they are safe to invest in, as she cited the current price-to-earnings ratio of the MSCI China index -- a gauge of the performance of mainland stocks -- at 20 times, which is slightly below the mean.

From the mid-term perspective, the polysilicon sector will be the largest winner of the net-zero target of carbon dioxide emission to be achieved in 2060, since it will enjoy the highest profit margin in the supply chain, said Mio.

Mio added that investors should look for Chinese companies that support sustainable energy, as those using traditional energy may suffer from increasing cost of production and significant margin squeeze in the long run.