Goldman Sachs’ Chief China Equity Strategist, Kinger Lau, made striking remarks during a program. Kinger Lau: “The market is trading at roughly nine times earnings. Looking back at the past two decades, we have essentially returned to the lows prior to September 2024; of course, we experienced our so-called policy pivot in September 2024. Another very important moving part is our earnings expectations—how profits are delivered to shareholders in Chinese equities. Three to two years ago, the earnings landscape was quite pessimistic, but despite falling below consensus expectations, we still anticipate approximately 10% earnings growth for the broader market. Overall, artificial intelligence continues to be a major driver of total earnings growth in the Chinese equity market. In particular, when we examine the first-half results, Chinese A-shares delivered 20% earnings growth—the highest rate in the past three to four years. Internet companies have underperformed on earnings delivery for some time, but we expect a meaningful rebound in earnings growth for the internet sector during the upcoming earnings season over the next few weeks. We prefer A-shares over H-shares at the index level. Although geopolitical risks, potential new restrictions or tariffs the EU may impose on Chinese imports, and trade tensions remain concerns for investors, the parties must continue negotiations to find a new balance in their trade relationship.”