Goldman Sachs: A slow bull market is forming in the Chinese stock market, and it is expected that key indices will have about 30% upside potential by the end of 2027.

Goldman Sachs stated that the Chinese stock market will enter a more sustainable upward phase, with key indices expected to have about 30% upside potential by the end of 2027, mainly driven by a 12% profit trend increase and an additional 5%-10% revaluation potential from CKH Holdings. As the bull market unfolds, macro risks may still trigger temporary pullbacks, but the dominant mentality should shift from "selling on highs" to "buying on lows". Key investment themes to focus on include the "Chinese Prominent 10", artificial intelligence, global leaders, and beneficiaries of anti-involution. Analysts such as Kinger Lau pointed out in reports that reasons for the sustained bull market include demand-side stimulus combined with the new five-year plan, which helps with growth rebalancing and mitigating internal risks; artificial intelligence is reshaping profit dynamics, with AI capital expenditure boosting profits; Chinese stocks still have a deep discount relative to global markets, and potential Chinese asset reallocation funds could reach trillions of dollars. Recently, Goldman Sachs has released multiple reports bullish on the Chinese market. On September 18, Goldman Sachs released a research report maintaining an overweight rating on A-shares and H-shares, recommending buying on dips, and bullish on leading private enterprises, artificial intelligence, anti-involution, and shareholder returns. Analysts such as Kinger Lau pointed out in the report that sustained profits are necessary for market trends, but liquidity is also a necessary condition, and the current "slow bull" trend in A-shares seems more stable than before. On October 19, a team of analysts led by Goldman Sachs' Chinese stock strategy analysts Fu Si and Liu Jinjin released a report titled "China Strategy: Going Global". In the report, Goldman Sachs analysts stated that investors should focus on Chinese listed companies seeking to increase overseas revenue, as the renminbi exchange rate remains competitive, China has taken a dominant position in the global supply chain, and Chinese products have cost and quality competitiveness globally, supporting the global expansion of these leading Chinese companies. The latest research report released by Goldman Sachs' stock strategy analysis team states that China's exports have evolved to the next level, with the notion that Chinese export companies only provide low-cost, low-value-added industrial products for developed market consumers being outdated. China is increasingly targeting emerging markets as final export destinations, gaining a larger share in global high-end manufacturing, and exporting services, intellectual property, and culture to the world. The team mentioned that the percentage of overseas revenue of Chinese listed companies has increased from 14% in 2018 to the current 16% (compared to an average of 53% for developed market companies and 48% for emerging market companies). This is mainly driven by the automotive, retail, and capital goods industries, with global revenue share growing at a rate of 0.4 percentage points per year. Goldman Sachs estimates that about 15% of sales from companies in the MSCI China Index currently come from overseas, which is higher than the 11% in 2018, with significant growth in the automotive, retail, and capital goods sectors. By 2028, this figure could rise to around 19%.