UBS Securities: A-share earnings growth is expected to accelerate to 8% by 2026.

UBS Securities China stock strategist Meng Lei published a Chinese stock strategy, believing that the profit growth of A-shares is expected to accelerate to 8% in 2026. He stated that considering the introduction of more supportive policies and the advancement of the "anti-internal competition" policy, the profit margins of non-financial sectors of A-shares may continue to improve. Meng Lei further analyzed that recent data shows a clear upward revision in profit growth expectations for the Shanghai and Shenzhen 300 Index in 2026. By sector, in the past 6 months, profit growth expectations for the information technology and raw materials industries in 2026 have been revised up by over 20 percentage points. In the past month, profit expectations for the information technology, raw materials, industrial, and optional consumer sectors have seen the most consistent upward revisions. Meng Lei said, "Recently, due to global geopolitical risks and the correction in the technology sector, global stock market volatility has intensified. However, looking at the medium term, factors such as incremental macro policies, accelerated A-share profit growth, and net inflows of long-term funds into the stock market are resonating, helping the A-share market to remain stable and achieve long-term growth." Regarding style allocation, UBS Securities recommends that investors balance their investments in both growth and value in the short term, and then overweight growth style again after market sentiment stabilizes. In addition, the institution maintains its recommendation to overweight cyclical sectors, as they are expected to benefit from the recovery of industrial enterprise profits.