UBS Securities: Market expectations for the profit recovery of A-shares are insufficient. This year's slow bull market is expected to be driven by performance and valuation.

UBS Securities China equity strategy analyst Meng Lei said on Friday that discussions on profit recovery in the A-share market are not yet sufficient. Currently, the stock prices of listed companies with good first quarter reports have seen a positive response. This year is expected to have a slow bull market driven by both profit and valuation. Meng Lei said that investors have been immersed in foreign geopolitical changes in the past month and have not paid much attention to profits. Due to some fundamental improvements, overseas investors' interest in A shares is increasing, and the focus may shift from traditional large-cap companies to themes such as overseas expansion and technology. The second quarter is expected to be a positive environment for A shares, with optimism for the performance of growth stocks. Small-cap stocks will outperform large-cap stocks, but the magnitude will not be as strong as last year, as the issuance of thematic ETFs benefits leading large-cap stocks.