HSBC Names 10 ‘Forgotten Gems’ in Asia as AI Rally Creates Concentration Risk
CNBC reported Tuesday that HSBC has identified ten underappreciated Asian equities it calls “forgotten gems,” cautioning investors that the AI-driven rally is creating dangerous levels of market concentration across the region.
AI Dominance Is Crowding Out Other Opportunities
Since ChatGPT’s launch in late 2022, technology names tied to artificial intelligence have absorbed a disproportionate share of investor capital. HSBC noted that more than half of total index returns on the FTSE Asia ex-Japan benchmark were attributable to just three names: TSMC, SK Hynix, and Samsung Electronics.
The bank warned that such a narrow rally carries real risks. Everyone holds the same positions, and the fixation on AI is creating pricing dislocations elsewhere. That gap, HSBC argued, is precisely where opportunity lies.
What HSBC Is Looking For in Forgotten Gems
To qualify as a “forgotten gem,” a company needed to demonstrate consistently high return on equity, durable market-share gains, strong profit margins, and reliable dividend payouts. The resulting shortlist of ten spans multiple sectors and geographies across Asia.
Names on the list include Hong Kong Exchanges, South Korean food producer Samyang Foods, and Indonesian telecoms operator PT Telkom. Each represents a profitable business with solid fundamentals that has been largely overlooked amid the AI frenzy.
A Closer Look at Three Standout Picks
Fuyao Glass Industry, the world’s dominant automotive glass manufacturer, caught HSBC’s attention for its pricing power and global footprint. The bank argued the market is underestimating Fuyao’s growth potential and margin durability. The company commands roughly 70% of the Chinese market and is expanding internationally, aided by production facilities in the United States.
WuXi AppTec, a contract drug research and manufacturing organisation, posted 11% revenue growth in 2025. HSBC analysts expect that pace to accelerate further in 2026, with the company itself guiding for 18% to 22% revenue growth in continuing operations. Capacity additions across Singapore, the European Union, and the US underpin that outlook, and HSBC believes the growth runway extends at least two to three more years.
Godrej Properties, an Indian residential developer, rounds out the highlighted names. While broader sentiment toward Indian real estate has cooled, HSBC said premium housing demand remains resilient. Godrej’s national reach, strong balance sheet, and brand recognition position it to take market share as smaller rivals struggle.
Background: Asia’s Index Concentration Problem
Index concentration in Asian equities is not new. Semiconductor and hardware makers rode the AI infrastructure boom hard through 2024 and 2025, leaving other sectors starved of capital flows. HSBC’s note reflects a growing debate among fund managers about whether the AI trade has become too crowded to offer compelling risk-adjusted returns at current valuations.
The bank’s broader argument is that disciplined, fundamentals-focused investors should look beyond the headline AI names before the market eventually re-prices the ignored corners of the region.
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