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UBS Sees 20% Drop for Biggest China Stocks on Profit Drop

UBS AG says it’s time to start cutting Chinese profit forecasts again.

Chen Li, the lender’s chief China equity strategist, estimates companies in the nation’s CSI 300 Index will post a 3 percent drop in earnings this year, versus consensus forecasts for a 14 percent gain. As analysts downgrade projections to account for a weak property market and depreciating yuan, China’s biggest non-bank stocks may extend this year’s drop to 20 percent, Chen says.