A-share earnings growth expected to reach 15% in 2023

China's A-share earnings growth is expected to reach 15 percent in 2023, UBS Securities China strategy analyst Meng Lei said in a recent media conference call as Sina reported on Thursday.

A-shares are currently still at a low valuation level, providing investors with a very good layout opportunity. Chinese stocks are on track to rise about 15 percent this year and outperform Asian markets by a wide margin.

UBS raised its economic growth forecasts for China from 4.9 percent to 5.4 percent in 2023, and from 4.8 percent to 5.2 percent in 2024 on March 6, further emphasizing its confidence in the country's economic prospects, said Wang Tao, head of Asian economic research and chief China economist at UBS.

China's consumer confidence is expected to get a further boost from the country's stronger-than-expected economic recovery.

According to Meng, the return of northbound capital to China has begun. Overseas investors began to return to China gradually at the end of last year, with hedge funds taking the lead and public offering funds returning slowly.

For the A-share market, foreign investment is similar to a fixed investment trend and has returned to the long-term trend line, and it is expected that there will be a net inflow of more than 300 billion yuan ($43.52 billion) during the whole year.

In addition to UBS Securities, a number of foreign institutions have recently expressed optimism about China's economic growth in 2023, or stated that China's economic rebound could be achieved earlier than expected in 2023. They include Fidelity International and Pictet Asset Management.

Meanwhile, domestic institutions are also optimistic about the future market. From the perspective of investment, themed way of thinking may run through the whole year, with digital economy and central enterprise reform as promising themes, said Fu Jingtao, A-share strategy chief analyst of Shenwan Hongyuan Securities.

Investors can focus on home appliances and consumer building materials sectors in the real estate chain, as well as resource stocks including copper, aluminum and coal, according to Fu.

China's listed companies have shown strong competitiveness, despite the impact of COVID-19. In 2022, nearly 90 percent of listed companies made profits, according to Wind citing these companies' annual performance reports by March 8.