2 1 Shi Ji Jing Ji Bao Dao·2025-12-03 07:41Core Viewpoint - Foreign investment continues to show optimism towards Chinese assets, particularly in the A-share market, with expectations of profit growth accelerating in the coming years [1][2][4]. Group 1: A-share Market Outlook - UBS analyst Meng Lei forecasts that the overall profit growth of A-shares is expected to rise from 6% this year to 8% by 2026, driven by improved nominal GDP growth and narrowing PPI declines [2][3]. - Several foreign institutions, including Morgan Stanley, JPMorgan, HSBC, and Goldman Sachs, have expressed positive views on the A-share market's performance in the upcoming year [1][6]. - The UBS global strategy team anticipates that global tech stocks will continue to rise in 2026, with recent data indicating a decrease in trading concentration in large tech stocks, alleviating concerns about overcrowding in the sector [2][4]. Group 2: Investment Themes and Strategies - Key investment themes for 2026 include technological self-reliance, consumer spending driven by corporate profit acceleration, and opportunities arising from Chinese companies expanding globally [3]. - In terms of style allocation, growth stocks are expected to outperform value stocks, while cyclical stocks may outperform defensive stocks due to ongoing policy support and profit recovery in industrial enterprises [3][6]. - The balance between large-cap and small-cap stocks is projected to remain stable, with small-cap stocks facing challenges in gaining excess liquidity, while large-cap industry leaders benefit from the growth of ETFs [3][4]. Group 3: Foreign Investment Trends - Foreign capital inflow into the Chinese stock market reached $50.6 billion in the first ten months of 2025, significantly surpassing the $11.4 billion for the entire year of 2024, with a focus on the technology sector [4][6]. - Recent data shows substantial inflows from both domestic and foreign investors into the Chinese stock market, with foreign inflows amounting to $2.257 billion in the past week alone [4][6]. - Analysts predict that as China's economic innovation momentum strengthens, the trend of foreign investment in Chinese tech stocks is likely to continue [6][7].