China Weekly Kickstart Markets fell 1 3 dragged by offshore tech

Portfolio Strategy Research 12 September 2026 | 4:09PM HKT

Markets fell 1%-3% dragged by offshore tech; Major banks and insurers announced capital-injection plans; Both inflation and trade growth accelerated in August

MXCN/CSI300 fell 3.0%/0.8% with offshore tech n MXCN/CSI300 12m forward P/Es are 10.2x/13.2x Kinger Lau, CFA | underperforming (HSTECH -5.5%) this week, while MXCN n I/B/E/S consensus 2026/27E EPS growth is 17%/17% Goldman Sachs (Asia) L.L.C.

Banks reached new all-time highs. Regulators held a briefing Timothy Moe, CFA and 26%/16% for MXCN and CSI300, respectively | on Sep 10 and unveiled the 15FYP for the financial sector, Goldman Sachs (Singapore) Pte n Real Estate/Health Care were revised up the most emphasizing capital market reform, support for innovation, Si Fu, Ph.D. off/onshore | long-term capital inflows and RMB internationalization. Goldman Sachs (Asia) L.L.C.

President Xi will visit India and attend the 18th BRICS Kevin Wang, CFA Flows (Pages 18) | Leaders’ Summit on Sep 12-13. 8 major state-owned banks Goldman Sachs (Asia) L.L.C.

and insurers announced the capital injection plans totaling n Southbound: US$51bn ytd Rmb360bn, led by the Ministry of Finance. Haidilao Key reports announced that its co-founder and wife of its CEO sold approximately US$350mn of shares held through her trust. n China Musings: 2Q/1H26 Earnings Brochure: Where to Southbound Connect had US$2.0bn inflows this week. Both find growth beyond AI? inflation (CPI/PPI +0.8%/+3.8% yoy) and trade growth Policies and news (exports/imports +24.9%/+28.2% yoy) both picked up in Aug. n China will raise retail price on petrol and diesel starting Sep 12. Performance (Pages 8-12)

n H: Energy (2.6%) & Momentum (5.7%) outperformed, Key charts: 2Q/1H26 Earnings, Tax & Barometers Real Estate (-2.8%) & New China (-2.7%) lagged n A: Utilities (1.0%) & DY (2.1%) outperformed, Real Estate (-3.5%) & Growth (-2.3%) lagged

Earnings and valuations (Pages 13-17)

Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to

Goldman Sachs China Weekly Kickstart

Charts of the Week: 2Q/1H26 Earnings

Exhibit 1: 45% of MSCI China index constituents Exhibit 2: Within China’s AI supply chain, the Exhibit 3: China expanded its global AI profit share beat prior consensus estimates in 2Q26, with IT and internal profit pool has further tilted toward sequentially in 2Q26 across Power, Infrastructure, Health Care delivering the highest share of beats hardware and Physical AI 26Q2 Results % profit share of China AI universe USD bn China profit share % of global AI universe 100% 112 120 45% AI+ Sector % Beat % In-Line % Miss 90% % 80% 100 Physical AI 2025 share 1Q26 share 2Q26 share Energy 40% 60% 70% 86 35%

80 30% Materials 46% 23% 31% 60% AI Model

50% 25% Industrials 37% 42% 21% 54 60 Infra 20% 40% Info Tech 60% 16% 23% 30% 37 40 Semis 15% 20% Cons Disc 34% 31% 34% 10% 10% 20 Power 5% Cons Stap 20% 20% 60% 0% Total profits 0% Financials 29% 47% 24% -10% Q26 2Q26 0 [RHS] Power Semis Infra Physical AI AI+ Aggregate applications Property 20% 80% Health Care 63% 37% Comm Serv 33% 42% 25% Utilities 50% 50% MXCN 45% 24% 31%

Source: FactSet, IBES, MSCI, Goldman Sachs Global Investment Source: FactSet, Goldman Sachs Global Investment Research Source: FactSet, Goldman Sachs Global Investment Research Research

Exhibit 4: Corporate buybacks remain active Exhibit 5: Net issuance turns dilutive to EPS growth Exhibit 6: More companies paid mid-term or special onshore but moderate offshore for MSCI China (ex-Financials) but stays accretive dividends in response to policy push since 2024 for A-shares (ex-Financials)

(RMB bn) Buyback amount (RMB bn) Net Issuance as % of Mkt Cap A-shares paying dividends at 1H result 100 A-shares 100 (Shares Sales - Repurchase) 1,000 3.0% Amount (RMB bn) 90 90 MSCI China Shares 900 HK-listed Chinese companies (ex-Fin) # of Companies Note: As of Sep 3, 2026 2.0% Dilution 80 80 800 based on buyback execution announcements; 70 numbers on the bar indicate share of total 28%54% 70 1.0% 700 A+H buybacks; HK-listed names buyback are 56% 47% 60…