2026-01-07 03:37:00
Summary:
- Goldman targets MSCI China 100 and CSI 300 5,200 by end-2026
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Upside case hinges on earnings acceleration aided by AI and policy
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Profit growth seen improving sharply versus 2025 pace
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2026 starts strong after solid 2025 gains
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Key risks: demand, property, geopolitics/trade shocks
Goldman Sachs is forecasting further gains for Chinese equities in 2026, arguing the next leg higher should be driven more by earnings delivery than pure sentiment as AI investment and policy support feed through into profits. Strategists expect the MSCI China Index to rise about 20% to 100 by end-2026, while the CSI 300 is seen climbing roughly 12% to 5,200, according to reporting on the call.
The constructive view rests on a step-up in profit momentum. Goldman’s strategists see earnings growth accelerating to around 14% in 2026–2027, a notable improvement from an estimated ~4% in 2025, with the lift supported by a mix of AI-related productivity gains and policy measures aimed at improving the operating backdrop for corporates.
Chinese equities have started 2026 on the front foot, adding to a strong 2025 performance that surprised many global allocators. The CSI 300 and MSCI China were already higher early in the year after logging double-digit advances in 2025, reinforcing the idea that a “slow bull” dynamic may be taking hold if earnings expectations keep firming.
Goldman’s broader framing is that valuations still leave room for upside if profits deliver and policy credibility holds, but the bank’s central message is that sustained returns will likely require real profit growth, not just multiple expansion. In that sense, AI adoption becomes a key swing factor: if it lifts margins and supports top-line growth across major index sectors, the earnings cycle could look meaningfully better than recent years.
Goldman Sachs note that risks remain. A weaker-than-expected domestic demand recovery, renewed property-sector stress, or a flare-up in geopolitical or trade tensions could undermine confidence and cap the valuation re-rating. Still, Goldman’s targets suggest the bank believes the base case is improving: a more earnings-driven market, supported by technology diffusion and a still-helpful policy mix, can keep China equities climbing into 2026.
