UBS Raises A-share Earnings Forecast, Expects 15% Growth in 2026

UBS's China equity strategist Meng Lei has raised the overall earnings forecast for A-share companies, expecting a 15% growth in total earnings for A-share companies in 2026. Meng pointed out that A-shares are likely to continue a steady rebound this year, driven by earnings recovery, new capital inflows, and the global technology narrative. However, it should be noted that A-shares may face two major uncertainties going forward: first, geopolitical issues, U.S. Treasury yields, and oil price fluctuations may affect the valuation of the technology sector; second, with public funds significantly overweighting the technology sector, there may be pressure for "profit-taking redemptions," which could limit the rebound potential.

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