UBS Equities-China A-Share Style Guide _Low Risk favoured; Growth decline...-119114283

ab1 December 2025Global ResearchChina A-Share Style GuideLow Risk favoured; Growth declinedWhat is the current investing environment?The explanatory power of macroeconomic drivers continued in November, as the impact of the US two-year spread slightly increased while the US 10-year to two-year spread fell. Pair-wise correlations across the equity market continued to decline while cross-sectional volatility also fell. We think these trends reflect lower price co-movements and stock opportunities.What is the market valuation?China's A-share market valuation remained at 14x 12-month forward PE in November. At the sector level, valuations for information technology and healthcare remained higher than other sectors. In addition, real-estate valuations remained at a historical high.What is working?Risk-off mode continued in November compared to October. The Low Risk outperformance continued with the 12-month Low Volatility posting a 7% return on a long-short basis. The Value and sub-factor rally continued, as 12-month forward Earnings Yield posted a 5% positive return. The declining Momentum performance narrowed with 12-month Price Momentum improving to -2% from -12% in October. Growth factor showed a performance dispersion: Fundamental Growth rose 1% in November, while 12-month trailing EPS Growth continued to decline.Monthly long-short style returns: MSCI China-A onshore (November 2025)Source: UBS Quant Database. Note: Size and sector neutral, cap weighted; price beta and volatility calculated as low minus highThis report has been prepared by UBS Securities Asia Limited. ANALYST CERTIFICATION AND REQUIRED DISCLOSURES, including information on the Quantitative Research Review published by UBS, begin on page 12. UBS does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.EquitiesChinaQuantitativeCathy Fang, PhDAnalystcathy.fang@ubs.com+86-21-3866 8891Paul WinterAnalystpaul-j.winter@ubs.com+61-2-9324 2080Will StephensAnalystwill.stephens@ubs.com+852-3712 3892Lynce Wang, FRMAnalystS1460522090001lynce.wang@ubs.com+86-21-3866 8638Oliver Antrobus, CFAAnalystoliver.antrobus@ubs.com+61-3-9242 6467Luke Brown, CFAAnalystluke.brown@ubs.com+61-2-9324 3620James CameronAnalystjames-a.cameron@ubs.com+61-2-9324 2074Aaron Guo, CFAAnalystaaron.guo@ubs.com+852-2971 7705Anita Mansbridge, FIAAAnalystanita.mansbridge@ubs.com+852-2971 7302Jia Li Mok, CFAAnalystjia-li.mok@ubs.com+65-6495 5772Jaiwish NolanAnalystjaiwish.nolan@ubs.com+1-212-713 1489China A-Share Style Guide 1 December 2025ab 2China A-Share Style GuideUBS ResearchMarket overviewWhat is driving the markets?Macroeconomic factors help provide a top-down view of market drivers. We look at a number of globally relevant macroeconomic factors and observe their l