China Weekly Kickstart：MXCN gained 2% but A~shares lost 2% amid heightened global market volatility； Export growth missed while import growth beat expectations in July

Investment Rating - The report indicates a positive outlook for MXCN with a target price of 67, suggesting a potential upside of 19% [30] - The CSI300 has a target price of 4000, indicating a potential upside of 20% [30] Core Insights - MXCN gained 2% while A-shares experienced volatility, with export growth missing expectations at 7.0% year-on-year, while import growth was at 7.2% year-on-year [2] - The report highlights that the State Council has released policies to boost services consumption and that Shenzhen has initiated a program to acquire unsold houses for affordable housing [2][20] - The report notes that the earnings growth forecast for 2024 is 12% for MXCN and 14% for CSI300, with respective P/E ratios of 8.8x and 10.9x [2][30] Performance Summary - MXCN and CSI300 forward P/E ratios are 8.8x and 10.9x, respectively, with expected EPS growth of 12% and 15% for 2024 and 2025 [2] - The report indicates that sectors such as Industrials and Energy have been revised up the most, while Materials and Momentum lagged behind [2] Earnings and Valuations - The report shows that 13% of all China-listed companies have reported earnings for 1H24, with a year-on-year growth of 10% [11] - The earnings growth for various sectors varies, with Consumer Discretionary at 19% and Energy at -11% [11] Policy Summary - The report outlines recent monetary and fiscal policies aimed at stabilizing the market, including the PBOC's supportive monetary policy stance and the allocation of RMB 300 billion (approximately USD 41 billion) in special treasury bonds [20] - It also mentions the relaxation of home-buying requirements in major cities to stimulate the housing market [20] Market Outlook - The report predicts that small caps are likely to underperform large caps modestly, while H shares are expected to outperform A shares over the next three months [24] - The overall economic forecast for China indicates a real GDP growth of 4.9% for 2024, down from 5.2% in 2023 [32]