China's economic stimulus policies are starting to have a positive impact on the e-commerce and retail sectors, according to Kenneth Fong, head of internet research at UBS Investment Bank.

During the recent Golden Week holiday, high-end retail saw a boost, driven by mall activities and promotional coupons that encouraged consumer spending. The tourism sector also experienced growth of around 6 percent during this period.

While advertising and recruitment are still slow, Fong noted that these sectors typically take one to two quarters to recover following an overall economic upturn. Earnings for internet firms are stabilizing, with the industry currently trading at an average price-to-earnings ratio of approximately 15 percent. Earnings per share are projected to grow by 16 to 17 percentage points over the next two to three years, indicating a continued rise in industry valuations.

Fong highlighted emerging opportunities in e-commerce, particularly in local groceries and cross-border shopping, where market penetration is still low. Leading platforms are focusing on improving supply chain efficiency rather than solely reducing prices to increase orders. He emphasized that companies with strong profit potential, including platforms and content-driven internet firms, are attractive investment options, along with those with narrow profit margins or low valuations.