Guide to the China Equity Slow Bull Market

UBS outlines the rationale for a long-term 'slow bull' market in China as household wealth transitions from property to equities. The strategy emphasizes overweighting tech-driven growth and tracking institutional capital inflows as the market matures.

Key Takeaways

• 1.The Chinese stock market is structurally transitioning to replace the property market as the nation's primary wealth reservoir.
• 2.Four primary strategies are recommended for the 'slow bull': buying the dip, structurally overweighting growth (tech), tracking long-term capital inflows, and investing in market infrastructure (brokers/insurers).
• 3.A fundamental shift is occurring where A-share 'investing' (dividends/buybacks) now outweighs 'financing' (IPOs/secondary offerings), improving investor returns.

Table of Contents

• Why is a 'slow bull' market needed? How has it progressed in recent years?
• Positioning strategies in a 'slow bull' market
• Equity strategy: earnings recovery/capital inflows to drive further rally
• Strategy No. 1: buy the dip amid major volatility
• Strategy No. 2: structurally overweight growth
• Strategy No. 3: track the trend of net inflows from long-term capital
• Strategy No. 4: buy sectors benefiting from capital market development
• Valuation Method and Risk Statement
• Required Disclosures

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