UBS Equity Preference List China A share 2026 10 09

Report Completion Date 9 October 2026, 07:20 UTC Chief Investment Office GWM Investment Research

China (A-share) Equity preferences

The China (A-share) Equity Preference list (EPL) is a list of our highest conviction Chinese stocks listed domestically in mainland China. Eva-C Lee UBS AG Hong Kong Branch • We remain constructive on China A-shares, supported by stronger earnings revisions, improving margins, and greater exposure to AI infrastructure, advanced manufacturing, and competitive exporters. The second-quarter results season Summer Xia reinforced our preference for A-shares over H-shares, as onshore earnings strength UBS AG Hong Kong Branch broadens beyond technology and higher payouts and buybacks provide additional support. Please see important disclaimers and • We favor a combination of innovation-led growth and quality dividend payers. disclosures at the end of this Our preferred opportunities span semiconductor equipment and AI-related chips document. and hardware; health care innovators and contract development and manufacturing organizations (CDMOs); large banks, insurers and brokers; and copper-related materials companies. Select power equipment and globally competitive industrial leaders provide complementary exposure to investment-led growth.

• For the medium to long term, we favor companies strengthening China’s technology supply chains and expanding internationally through differentiated products, operational efficiency, and durable competitive advantages. We retain an Attractive view on onshore high-dividend stocks, prioritizing resilient cash generation, disciplined capital allocation, and sustainable distributions amid low domestic yields and an uneven economic recovery.

Latest changes We have increased the portfolio weights of China Merchants Bank - A by 2.0 percentage points (pps) and China Telecom - A by 1.0ppt. Conversely, we have decreased the portfolio weight of BYD - A by 2.0pps and NAURA Technology Group by 1.0ppt.

Most Preferred Company Changes* Currency Weight

Agricultural Bank of China - A CNY 5.0% Bank of China (Group) - A CNY 5.0% BYD - A Weighting CNY 1.0% China Construction Bank - A CNY 5.0% China Life Insurance - A CNY 5.0% China Merchants Bank - A Weighting CNY 5.0% China Telecom - A Weighting CNY 5.0% China Yangtze Power CNY 5.0% CITIC Securities - A CNY 5.0% Foxconn Industrial Internet CNY 5.0% Fuyao Glass - A CNY 3.0% Inner Mongolia Yili Industrial CNY 5.0%

Chief Investment Office GWM, 9 October 2026 Page 1 of 22

Company Changes* Currency Weight

JCET Group CNY 5.0% Jiangsu Hengrui Pharmaceuticals - A CNY 3.0% Luxshare Precision Industry CNY 5.0% Muyuan Foods CNY 5.0% NARI Technology CNY 3.0% NAURA Technology Group Weighting CNY 5.0% Ping An Insurance (Group) - A CNY 5.0% Shengyi Technology CNY 3.0% WuXi AppTec-A CNY 5.0% Zhejiang Sanhua Intelligent Controls CNY 2.0% Zijin Mining Group - A CNY 5.0%

Source: UBS, Consider potential trading restrictions, all figures are rounded *Changes since the last publication

Positioning and key trends We remain constructive on China A-shares as improving earnings and margins provide firmer fundamental support for the market. Relative to offshore Chinese equities, the onshore market offers greater exposure to technology, advanced manufacturing, and competitive exporters. These businesses are benefiting from AI investment, product upgrading, and overseas demand, reducing their reliance on a broad recovery in domestic consumption. We therefore prefer A-shares within China.

The second-quarter results season strengthened this case. Overall A-share earnings rose 29.4% year over year, accelerating from 9.3% in the first quarter, while revenue growth improved to 9.8% from 5.1%. CSI 300 revenue growth accelerated to 6.35%, and gross margins reached 20.11%, up 123 basis points year over year. Earnings upgrades are broadening beyond technology to industrials, health care, and financials, although consumer-facing sectors remain under pressure. We favor companies with visible demand, pricing power, and scope for further operating leverage.

Our positioning combines structural growth with resilient income. Semiconductor equipment remains our preferred technology segment…