Eliza Wong
Market Uptrend Expected to Continue with Strategic Focus on High-Growth Sectors
Chinese equity markets are poised for extended gains, according to analyses from top domestic brokerages. The consensus highlights a shift toward global exposure valuation, sustained liquidity support, and strategic positioning in high-growth industries. This optimistic outlook comes despite recent volatility, with experts urging investors to maintain a bullish mindset and focus on quality sectors.
Key Takeaways from Major Brokerage Reports
– Market上涨趋势 (upward trend) is expected to continue, driven by global exposure dynamics and liquidity inflows.
– High-growth sectors like technology, resources, and consumer electronics remain preferred investments.
– Structural opportunities exist in both emerging technologies and traditional value segments.
Global Exposure: The New Fundamental Valuation Framework
CITIC Securities (中信证券) emphasizes that traditional domestic economic cycle analysis no longer fully captures market fundamentals. As Chinese companies expand globally, particularly in manufacturing, they are converting market share into pricing power. This shift necessitates evaluating fundamentals through a global exposure lens rather than purely domestic metrics.
From Domestic to Global: A Structural Shift
The current market rally shows that outperforming stocks—whether growth or value—are predominantly those with international exposure or deep integration into global supply chains. This trend underscores the importance of global exposure in assessing both fundamental health and liquidity matching. Investors should look beyond short-term情绪溢价 (sentiment premium) and focus on structural trends driven by smart money.
Sustained Bull Market: Economic Transformation and Policy Support
Guotai Junan Securities (国泰君安证券) and Haitong Securities (海通证券) argue that China’s equity rally has sustainable foundations. Three key drivers support this view: accelerated economic transformation reducing uncertainty, declining opportunity costs for equity investments, and supportive policy reforms aimed at improving investor returns.
Broad-Based Opportunities Across Sectors
The transformation-driven bull market isn’t limited to specific sectors. Opportunities exist in both emerging technologies and traditional industries undergoing valuation repair. Recommended sectors include港股互联网 (Hong Kong internet stocks),创新药 (innovative pharmaceuticals), and国潮品牌 (domestic trend brands). Additionally, cyclical sectors like有色金属 (non-ferrous metals) and化工 (chemicals) benefit from improved supply-demand dynamics.
Liquidity and Momentum: Why the Bull Run Has Room to Run
GF Securities (广发证券) notes that while recent trading volume contraction and increased volatility have caused concern, historical patterns suggest that peaks in volume often precede continued—if slower—advances. The liquidity-driven narrative remains intact, with incremental capital poised to enter markets.
The Four Capital Reservoirs
GF Securities identifies four sources of potential capital inflow: household savings shifting to equities, institutional allocations, foreign investment, and policy-driven liquidity support. These reservoirs suggest that the bull market’s liquidity foundation remains strong, with daily turnover of 1.6-1.8 trillion RMB indicating healthy sentiment absorption.
Sector Strategy: High Growth and Turnaround Opportunities
China Merchants Securities (招商证券) recommends focusing on both high-growth areas and turnaround stories. Based on 2025 earnings projections, sectors like软件开发 (software development) and通信设备 (communication equipment) show strong profitability, while养殖业 (animal husbandry) and饮料乳品 (beverages/dairy) present recovery potential.
Inflation Improvement as a Catalyst
CSC Financial (中信建投) highlights that deflationary concerns may ease, attracting foreign capital back to Chinese assets. This macro improvement, combined with sector-specific catalysts, supports continued momentum in areas like AI,新能源 (new energy), and创新药 (innovative pharmaceuticals).
Investment Implications and Forward Guidance
The collective wisdom from China’s top brokerages suggests maintaining exposure to Chinese equities while being selective about sectors and entry points. The global exposure theme remains critical, as does attention to policy developments and liquidity conditions.
Investors should consider increasing allocations to high-growth sectors while keeping some exposure to value segments offering valuation repair potential. Monitoring key indicators like trading volume, policy announcements, and global liquidity conditions will be essential for navigating coming months successfully.
For those seeking to capitalize on these trends, now is the time to review portfolios and ensure alignment with the structural shifts shaping China’s equity markets. Consult with financial advisors to identify specific opportunities matching your investment objectives and risk tolerance.
