Meng Lei: A-shares are expected to grow by approximately 15% this year, driven by profitability

Meng Lei, China stock strategy analyst at UBS Securities, pointed out that A-shares are expected to be profit driven this year, with an overall profit growth of about 15%. The rise in PPI will drive the recovery of corporate revenue, and the active capital market in the second quarter will drive the revenue of the financial sector. Meng Lei stated that the profit margin of A-shares has improved, and the proportion of overseas revenue of mainland enterprises has increased, but the valuation of A-shares has been suppressed. Meng Lei believes that the flow of deposits from mainland residents to the stock market is not achieved overnight, and residents prefer insurance and wealth management products. Meng Lei pointed out that the deleveraging of A-shares has come to an end, and the market rebound pace is relatively slow. The allocation of public funds to the technology sector has reached a historical peak. UBS is optimistic about overseas, industrial, high dividend, and growth stocks, but expects a slowdown in global technology stock growth after the third quarter.