Investment Rating - The report maintains an "Overweight" (OW) stance on both A-shares and Offshore China despite trimming the CSI300 12-month target from 4600 to 4400 due to lower earnings growth and a more conservative valuation [1][44]. Core Insights - The anticipated nationwide childbirth subsidy program in China is expected to boost GDP growth by 25 basis points (bp) annualized in the second half of 2025, although it may slightly lower GDP growth in 2026 [1]. - The report indicates a significant inflow of US$3.4 billion into Southbound investments this week, with Northbound holdings data suggesting US$3.3 billion inflows in the second quarter of 2025 [1][45]. - The 12-month forward price-to-earnings (P/E) ratios for MXCN and CSI300 are projected at 11.8x and 13.1x, respectively, with earnings per share (EPS) growth estimates of 5% for 2025 and 14% for 2026 for MXCN, and 21% for 2025 and 14% for 2026 for CSI300 [8][43]. Summary by Sections Performance - The report highlights that Real Estate and GARP (Growth at a Reasonable Price) sectors outperformed, while Materials and ROE (Return on Equity) lagged [7]. Earnings and Valuations - The report revises the earnings growth forecast for 2025/26 to 9% and 10% respectively, with a consensus EPS growth of 5% for 2025 and 14% for 2026 [43][66]. Policies and News - Onshore exchanges have issued final regulations on program trading, indicating a regulatory push towards high-quality development in the securities industry [4]. Market Update - The report notes that trade policy uncertainty has eased, and financial conditions have loosened, which may positively impact market performance [35][39]. Sectoral Insights - The report suggests that sectors such as Internet/Media/Entertainment, Consumer Retail & Durables, and Tech Hardware are positioned for growth, while Energy, Chemicals, and Utilities are underweight [44][67].

Investment Rating - The report indicates a positive outlook for cash returns in the Chinese market, with expectations for aggregate dividends and buybacks to reach Rmb3.0tn and Rmb0.6tn respectively in 2025, reflecting a year-on-year growth of 10% and 35% [1][11]. Core Insights - Chinese listed companies are experiencing record-high cash returns, driven by strong policy support and conservative cash return practices, with a significant increase in dividends and buybacks anticipated in the coming years [1][11]. - The report highlights a preference among investors for "Old China" companies that prioritize shareholder returns, with a correlation between cash spending on dividends/buybacks and increased company valuations [2][45]. - There is a growing appetite for cash return strategies among various types of Chinese investors, as these strategies are perceived as offering superior returns compared to bonds in a low-interest rate environment [3][53]. Summary by Sections Cash Returns Growth - Following the "Nine Measures" policy released in April 2024, over 4300 companies recorded Rmb2.7tn in dividends in 2024, with a dividend payout ratio of 39%, up from 37% in 2023 [11][12]. - The expectation for total dividends in 2025 is Rmb3.0tn, supported by high-single digit earnings growth and an increase in payout ratios [11][12]. Buybacks and Financial Incentives - A-share and offshore companies repurchased approximately Rmb160bn and Rmb300bn worth of shares in 2024, marking increases of 56% and 79% year-on-year [20][31]. - The re-lending program for corporate buybacks has seen strong adoption, with over 620 A-share firms announcing credit agreements totaling Rmb133bn [31][25]. Investment Strategies - The GS China Shareholder Returns Portfolio has been refreshed to include 30 GS-Buy rated companies, which are actively returning capital to shareholders [63][64]. - The GS Chinese Prominent 10 portfolio focuses on large-cap companies investing heavily in growth while also providing decent cash returns, appealing to investors seeking a mix of growth and income [64][65]. Sector Analysis - Companies in traditional sectors like Financials and Utilities tend to favor dividends, while those in New Economy sectors like TMT and Healthcare are more inclined towards buybacks [37][46]. - The report categorizes over 6700 Chinese listed companies into "New China" and "Old China," noting differing investor preferences for capital allocation between these groups [46][45].

JPMorgan analyst Michael W. Mueller announced several ratings changes during the firm’s quarterly CRE update webinar.The analyst upgraded Ventas Inc. VTR from Neutral to Overweight and raised the firm’s December 2025 price target to $72 from $70.Mueller cited robust internal and external growth, including double-digit same-store net operating income gains and a steady pace of acquisitions, as key drivers supporting a positive outlook for normalized FFO per share growth.The analyst noted that compared to pee ...