(Yicai) Nov. 14 -- China’s major stock market indexes will achieve double-digit growth next year due to increases in earnings per share and valuation recovery, according to Goldman Sachs.

The MSCI China Index, a gauge of large and mid-cap shares of Chinese companies, and the CSI 300 Index, which tracks the top 300 stocks traded on the Shanghai Stock Exchange and the Shenzhen Stock Exchange, will rise by 12 and 16 percent, respectively, in 2024, Liu Jinjin, chief China equity strategist of the New York-headquartered firm, said during a media conference held today.

Goldman Sachs has maintained its buy rating on A-shares but downgraded its rating on Chinese firms' equities listed offshore because companies' profitability is rebounding due to the improving Chinese economy while mainland-listed firms' market caps are at record lows, Liu said, adding that the domestic stock markets are less influenced by geopolitics and global capital flows.

The investment bank predicts that the profitability of China’s internet sector will maintain a 13 percent growth rate next year after surging by 35 percent this year because of cost optimization and improvements in monetization capabilities. Moreover, it anticipates that China’s hardware industry will benefit from global recovery next year after experiencing widely narrowing profitability for two straight years.

Goldman Sachs is sanguine about China's macroeconomic outlook. Shan Hui, chief China economist, said that the nation's gross domestic product could expand by 4.8 percent in 2024, higher than the 4.6 percent growth rate predicted by the International Monetary Fund.

The optimistic outlook is prompted by China’s stable consumption prospects, stronger support coming from the central government, and expanded real estate, infrastructure, and manufacturing investment, per Shan. Finally, Goldman Sachs remains optimistic about the global economy as wider recovery could also positively influence Chinese exports, she added.

Editor: Emmi Laine