Summary of Key Points from the Conference Call Industry Overview - Global equities have reached all-time highs, with notable performances in various sectors: - US Momentum Long index up 15% YTD - Pre-Profit Tech stocks up 12% YTD - Meme stocks increased by 5% in the past week - CSI1000 index has risen for 7 consecutive sessions - KOSPI up 9% YTD after a 76% increase last year - Gold prices continue to rise, and credit spreads are narrowing [2][3] Core Insights and Arguments - Market sentiment is positive, with a strong appetite for risk [4] - Global funds have reduced their exposure, leading to the fastest net selling of equities in over 8 months, particularly in the US and China [4] - The outlook for 2026 remains optimistic, driven by different growth factors compared to 2025, including AI capital expenditures and dovish Federal Reserve expectations [6][7] - Portfolio diversification is emphasized as a key strategy, with tactical hedges recommended due to the current macro conditions being perceived as too comfortable [11][13] Regional Equity Insights - The report suggests a modest pro-risk stance with an overweight (OW) position in equities across various regions: - OW in MSCI Asia Pacific ex Japan, S&P 500, TOPIX, and select commodities [18] - Emerging markets (EM) are viewed as having better risk-reward profiles compared to the S&P 500 [21] - European equities are trading at a significant discount compared to US peers, indicating potential alpha themes to watch [29] - Asia is expected to maintain a similar trajectory, with regional EPS growth projected at 19% for this year and 12% for 2027 [32] Specific Country Insights - China, Korea, and India are recommended for overweight positions, while Japan is downgraded to market weight due to valuation concerns [33][41] - India's market is anticipated to recover after a significant underperformance last year, with foreign institutional investors showing renewed interest [43] - Valuation premiums for China have narrowed significantly, indicating a potential shift in investment dynamics [45] Additional Considerations - The upcoming earnings season is expected to show a 7% growth, which is considered a low bar to surpass, with a focus on the acceleration of growth in subsequent quarters [22] - Retail investor enthusiasm is rising, with margin balances hitting new highs, suggesting a longer "Spring Stir" window due to the later-than-usual Chinese New Year [39] - The report highlights the importance of continued momentum in China for the overall Asian market outlook [36][37]

7 January 2026 | 6:21AM SGT Portfolio Strategy Research Sunil Koul +44(20)7051-4931 | sunil.koul@gs.com Goldman Sachs International Bruce Kirk, CFA +81(3)4587-9950 | bruce.kirk@gs.com Goldman Sachs Japan Co., Ltd. Amorita Goel, CFA +65-6654-5445 | amorita.goel@gs.com Goldman Sachs (Singapore) Pte ASIA-PACIFIC PORTFOLIO STRATEGY 2026 Outlook: Room to run, but a tighter leash Our positive stance on Asian equities rests on mid-teen earnings-driven returns. Higher starting valuations point to a good year, albei ...

Summary of Key Points from the Conference Call Industry Overview - The conference call discusses the performance of the MXCN and CSI300 indices, highlighting a mixed performance in the Chinese equity markets with MXCN losing 1% while A-shares gained 1% [1][1] - The call also notes the impact of macroeconomic factors, including President Xi's remarks at the UN Climate Summit and the joint press conference by Chinese financial regulators [1][1] Core Insights and Arguments - **Market Performance**: - MXCN lost 0.8% while CSI300 gained 1.1% this week, indicating a divergence in market performance [1][1] - The sectors that outperformed include Materials (3.5%) and Growth (3.7%), while Consumer Staples (-3.2%) and Value (-3.4%) lagged [2][2] - In A-shares, IT (3.6%) and Growth (3.5%) outperformed, while Consumer Staples (-3.7%) and Dividend Yield (-3.9%) lagged [3][3] - **Earnings and Valuations**: - The forward P/E ratios for MXCN and CSI300 are 13.6x and 14.7x, respectively [9][9] - The I/B/E/S consensus for EPS growth in 2025/26 is projected at 2%/16% for MXCN and 15%/13% for CSI300 [9][9] - Health Care and Materials sectors were revised up the most for both onshore and offshore markets [9][9] - **Investment Flows**: - Southbound Connect recorded US$5.6 billion in inflows this week, indicating strong foreign interest in Chinese equities [1][1][5] - Year-to-date, Southbound flows reached US$148 billion [5][5] Additional Important Insights - **Policy Developments**: - The Ministry of Industry and Information Technology (MIIT) released development plans for various industries, including building materials and steel [6][6] - A requirement for export licenses for Battery Electric Vehicles (BEVs) will be implemented starting January 2025 [1][1] - **Market Sentiment and Seasonal Trends**: - Historical data suggests that Consumer Staples and Real Estate tend to underperform in the week following the National Day holiday [10][10] - The report indicates a potential modest outperformance of A-shares over H-shares in the next three months based on proprietary models [28][28] - **Geopolitical Context**: - The US-China relations barometer indicates a score of 71, reflecting ongoing geopolitical tensions [30][30] - Recent meetings between President Xi and business leaders suggest a potential easing of policies towards private enterprises [32][32] - **Investment Strategy**: - The report emphasizes an overweight position in China onshore and offshore markets, with a focus on cyclical sectors [16][16] - The strategy includes a rotation from value to growth, highlighting sectors such as Internet/Media/Entertainment and Consumer Retail [16][16] This summary encapsulates the key points discussed in the conference call, providing insights into market performance, sector analysis, investment flows, policy developments, and geopolitical context.