UBS Securities China equity strategy analyst Meng Lei has raised his overall earnings forecast for A-share companies. In his latest comments, he said aggregate earnings of all A-share companies are expected to grow by 15% in the full year 2026. Meng attributed that view to an earnings recovery, incremental capital entering the market and a global technology narrative, and he expects A-shares to keep up a steady rebound for the rest of the year. Still, he flagged two uncertainties that could limit further upside. One is tied to macro factors: geopolitical developments, U.S. Treasury yields and oil price swings may weigh on the valuations of rate-sensitive technology sectors. The other is about positioning: with mutual funds already heavily overweight technology stocks, a wave of so-called “break-even redemptions” — investors exiting once their holdings return to the original cost basis — could restrain the rebound. Jinshi carried his comments, and the report appeared on Odaily.
UBS Securities China equity strategy analyst Meng Lei has raised his earnings expectations for A-share companies. His latest view points to aggregate profit growth of 15% for all A-share companies in 2026.
In the same assessment, Meng said a recovering earnings base, fresh capital entering the market and the global technology narrative should keep A-shares on a steady rebound for the remainder of the year.
He also cautioned that two uncertainties may weigh on the market's next stage.
- Geopolitical risks, swings in U.S. Treasury yields and oil prices could hurt valuations in rate-sensitive technology sectors.
- With mutual funds already heavily overweight technology shares, “break-even redemptions” — investors exiting once their holdings return to their original cost — could emerge and limit the rebound.
Jinshi reported Meng's comments.
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