UBS Portfolio Adjustments to China Global Equity Focus List

UBS announced a series of changes to its China Global Equity Focus List, reflecting its continued constructive stance on Chinese equities amid accelerating artificial‑intelligence (AI) adoption and supportive policy trends. The bank added a 3% portfolio weighting for Kuaishou Technology (HK:1024), citing the company’s progress in AI, particularly its Kling AI model, which UBS describes as a global leader in text‑to‑video generation with user‑engagement levels comparable to OpenAI’s Sora. UBS also initiated a 2% position in Meituan (HK:3690), arguing that the most intense phase of competition in China’s food‑delivery sector has passed and that a more rational competitive environment should support a tactical rebound and steadier earnings recovery from the second quarter onward.

In addition to the new additions, UBS increased existing weightings: Ping An Insurance was lifted by 2 percentage points, Alibaba Group by 1 percentage point, and both WuXi AppTec and Xiaomi were each raised by 0.5 percentage points. Conversely, the bank removed China Merchants Bank, China Mobile (HK), and Jiangsu Hengrui Pharmaceuticals from the focus list and trimmed exposure to China Construction Bank, Midea Group, Yum China, China Pacific Insurance, and PICC Property & Casualty.

UBS reiterated its “attractive” view on Chinese equities, emphasizing robust AI‑driven growth, leadership in innovation, and ongoing chip localisation. The brokerage expects mid‑teens annual returns for Chinese equities through June 2027, underpinned by improving corporate fundamentals, continued policy support, and the long‑term growth potential of AI.

Key Figures

  • Kuaishou Technology: 3% portfolio weight
  • Meituan: 2% portfolio weight
  • Ping An Insurance: +2 percentage points
  • Alibaba Group: +1 percentage point
  • WuXi AppTec: +0.5 percentage points
  • Xiaomi: +0.5 percentage points
  • Removed: China Merchants Bank, China Mobile, Jiangsu Hengrui Pharmaceuticals
  • Trimmed: China Construction Bank, Midea Group, Yum China, China Pacific Insurance, PICC Property & Casualty

Strategic Rationale

UBS highlighted AI adoption, chip localisation, and supportive regulatory policies as the primary drivers for its overweight in technology‑focused Chinese stocks and its expectation of mid‑teens returns through mid‑2027.