China Weekly Kickstart MSCI China declined 3 while CSI300 remained flat

Portfolio Strategy Research 15 August 2026 | 12:31PM HKT

MSCI China declined 3% while CSI300 remained flat; US announced drone tariffs; HSI Company proposed HSTECH index revamp

MXCN/CSI300 declined 3.1%/0.6% this week, with Materials (-3.9%) & GARP (-2.5%) lagged Kinger Lau, CFA | high-dividend-yield stocks outperforming. The PBOC Goldman Sachs (Asia) L.L.C. Earnings and valuations (Pages 13-17) Timothy Moe, CFA released its Q2 monetary policy report, using stronger | easing rhetoric but providing few specific signals of n MXCN/CSI300 12m forward P/Es are 10.6x/13.9x Goldman Sachs (Singapore) Pte

additional broad-based monetary easing. On August 13, the Si Fu, Ph.D. n I/B/E/S consensus 2026/27E EPS growth is 17%/17% | US President Trump signed a proclamation imposing tariffs Goldman Sachs (Asia) L.L.C. and 26%/15% for MXCN and CSI300, respectively up to 100% on imported drones and their critical Kevin Wang, CFA | components. DeepSeek launched its flagship V4-Pro model n Financials/Info Tech were revised up the most Goldman Sachs (Asia) L.L.C.

alongside a substantial API price adjustment, raising rates off/onshore for certain models by more than threefold. Hang Seng Flows (Pages 18) Indexes Company proposed to expand the thematic coverage of the HSTECH Index. MSCI announced the results n Southbound: US$48bn ytd of its August index review, adding 33 Chinese stocks, Key reports effective after the market close on August 31. CPI (+0.5% yoy) and PPI (+3.5% yoy) inflation surprised to the downside n China Strategy: AI Changes The Game: Correction, and declined in July. 17%/24% of All China listed/MSCI China Rotation, and Diversification universe has reported with 2Q26 earnings rising 22%/declining 7% yoy. Policies and news

Performance (Pages 8-12) n The PBOC released its “15th Five-Year” Reform and Development Plan, alongside nine supporting action n H: Real Estate(4.9%) & Momentum(2.7%) outperformed, plans targeting specific financial sub-sectors. Comm Svcs (-4.2%) & New China (-4.3%) lagged Key charts: Tech Correction, Southbound Flows, Earnings n A: Comm Svcs (2.6%) & DY (3.5%) outperformed, Tracker & Barometers

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Goldman Sachs China Weekly Kickstart

Charts of the Week: Tech Correction, Rotation, and Diversification

Exhibit 1: We present 10 indicators/signals to Exhibit 2: Momentum, Size, and Growth have seen Exhibit 3: Return contribution/concentration has assess the tactical risk and reward for Chinese AI deeper corrections in the past few weeks dropped significantly in HK, but remains high in A Hard Tech equities and to gauge the maturity of the shares correction cycle

6m Rolling Relative Return Mkt cap representation 75% Growth vs Value CSI2000 vs CSI300 Momentum Earnings Revision STAR50 Chinext Hard Tech HSTECH 60% 30% Note: Hard Tech is taken from MSCI China Index constituents based on its GICS sector classification; We use All China Stocks except US-listed as the 45% 25% universe 23% 30% (2.0 s.d.) 20% 15% 1% 0% (-0.4 s.d.) 15% -11% 8% -15% (-0.8 s.d.) 10% (2.1 s.d.) -20% 8% -30% (-1.4 s.d.) -36% (-0.9 s.d.) 5% -45% (-2.4 s.d.) 4% (2.5 s.d.) Jul-14 Jul-15 Jul-16 Jul-17 Jul-18 Jul-19 Jul-20 Jul-21 Jul-22 Jul-23 Jul-24 Jul-25 Jul-26 Jul-27 0%

Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22 Jan-23 Jan-24 Jan-25 Jan-26 Jan-27

Source: Goldman Sachs Global Investment Research Source: Factset, MSCI, Goldman Sachs Global Investment Research Source: Wind, Factset, Goldman Sachs Global Investment Research

Exhibit 4: Headline index valuations for A-share Exhibit 5: Domestic equity mutual funds are still Exhibit 6: Capex revision momentum has started to Tech companies have normalized heavily exposed to Tech equities in their portfolios slow from a high base

12m fPE (x) CSI300 CSI300 Median Domestic mutual fund positoning QoQ Capex revisions % (NTM & STM Average) ChiNext Median STAR50 Median 50 50% OW/UW in IT (vs All A Index wgt) 35% CSI1000 US hyperscalers 45 Allocation in IT (as % of AUM) 43% 30% 41.3 40% 24% (2.0 s.d.) 25% 40 (0.2 s.d.)…