Goldman Sachs sees 30% upside for China stocks through 2027
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Goldman Sachs Group Inc. expects China’s key stock index to gain 30% by end-2027, supported by pro-market policies, rising profits and strong money flows.
“We now call for a more sustained uptrend for China equities,” strategists including Kinger Lau wrote in a note dated Wednesday. The nation’s stocks are poised for a less volatile advance, “reminiscent of an equity cycle transition from hope to growth.”
Goldman strategists last month said investors should embrace a “buy-on-dip mindset” on the country’s shares amid undemanding valuations and potential for greater household and institutional allocation. In July, they raised their 12-month target for the MSCI China Index to 90 from 85, citing improving prospects for a US-China trade deal.
The gauge surpassed that target in early October but has retreated since. It’s on track to decline for its first month in six after a rally propelled by artificial intelligence optimism cooled. Investors are now closely watching this month’s Fourth Plenum meeting and anticipated talks between US President Donald Trump and China’s President Xi Jinping for clues on the stock market’s outlook.
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Further demand-side stimulus, profit growth driven partly by AI development and robust flows from both domestic and foreign investors are among factors helping to boost Chinese shares, according to Goldman. Earnings may increase 12% in the next three years, while equity multiples could jump 5%-10% from current levels, the broker added.Still, a cyclical macro slowdown in the fourth quarter and resurgent tariff risks “could be taken as profit-taking excuses,” the strategists wrote. Unless those issues intensify, “we would stay invested and accumulate on corrections.”
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