Eben@CANSLIM ResearchMSCI China earnings grew 16% year-on-year in 2Q26, rebounding from a 8% contraction in 1Q26, but the recovery was concentrated in Financials. Goldman Sachs’ China strategy team reports that MXCN and CSI300 fell 0.9% and 1.3% respectively this week, dragged by onshore tech, while both official and unofficial manufacturing PMIs rose in August. The bank’s A-H rotation model points to H shares modestly outperforming A shares over the next three months.
Key Takeaways
- MSCI China earnings grew 16% year-on-year in 2Q26, a sharp reversal from -8% in 1Q26, though the rebound was driven mainly by Financials, per Goldman Sachs’ China Weekly Kickstart.
- MXCN and CSI300 12-month forward P/Es stand at 10.4x and 13.2x, with I/B/E/S consensus 2026/27E EPS growth of 17%/17% for MXCN and 26%/16% for CSI300.
- Southbound Connect recorded US$49bn of year-to-date inflows, including US$0.9bn this week, while Asian equities de-grossed for a second consecutive month in August.
- FTSE China index rebalancing is set to drive the largest passive inflows into Tech Hardware & Semis (about US$442mn net) and the biggest outflows from Banks (about -US$542mn).
- Goldman Sachs’ US-China Relations Barometer reads 44, with the equity market policy barometer at -0.4, indicating a mildly easing policy stance.
What Goldman Sachs’ China Weekly Kickstart Says About the Market
In a report titled “China Weekly Kickstart”, dated 4 September 2026, Goldman Sachs (Asia) analysts Kinger Lau, Timothy Moe, Si Fu and Kevin Wang report that Chinese equities lost ground over the week, with the MSCI China index (MXCN) down 0.9% and the CSI300 down 1.3%. Onshore technology led the decline, with the STAR50 and ChiNext indices falling 5.1% and 4.0% respectively.
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