Professionals debate the critical moment of A-shares

　　Since a package of incremental favorable policies was released in late September, the A-share market has continued to rise, and market transactions have picked up significantly. However, the ensuing wide fluctuations and sector rotation have left many investors confused.

　　At the critical moment when the market is diverging, many well-known investors and fund managers from the public and private equity industries have spoken out intensively. Combining the structured interpretation of this round of the A-share market and their judgments on policies, fundamentals, and other factors, It is generally believed that as market activity increases, the main direction will attract a large number of funds, and the market will enter a benign slow bull state.

　　Image source: Picture Elf

The repair market will diverge

　　Since late September, the A-share market has entered the first stage of recovery and has performed violently. Xu Zhibiao, director of the equity investment department of Cathay Fund, believes that the essence is extreme compression of valuations and an increase in risk appetite caused by policy shifts. Market volatility has increased significantly, trend funds dominate market sentiment, and the market easily incurs periodic large-magnitude unilateral fluctuations, while subsequent market conditions will diverge.

　　In the short term, Kou Zhiwei, a partner at Chongyang Investment, thinks that the market neither has the foundation for a rapid bullish move nor turns around and falls back. The biggest impact of a series of macro policies on the market is to stabilize macro expectations. As market volatility declines, the market's focus will return to fundamental factors such as macroeconomics, industries, and companies.

　　The volatility of A-shares has gradually decreased. Jin Zicai, deputy general manager and equity investment director of Caitong Fund, holds the view that the overall market will enter a very benign slow bull state.

Market consensus reached a consensus

　　In the fund's third-quarter report in 2024, well-known fund manager Shi Cheng believed that the core problem lies in the mismatch between fully supplied manufacturing capacity and global differentiated demand, and companies with product innovation and control channels will have the greatest dividends.

　　As market risk appetite increases, Xu Zhibiao is more optimistic about opportunities in growth sectors such as new energy, medicine, and technology. He concluded that the targets that are likely to strengthen in the later period are companies whose performance this year still has 10%-20% room for growth, whose third-quarter performance trend shows an upward trend, and whose PE is more than 10 times, while the product type is expected to usher in a “Davis Double Click.”

　　Jin Zicai predicts that technology is the top priority in the main line of the A-share market and is necessary to lay out the direction of AI. The AI industry cycle is still in its infancy, but its scope of radiation is certainly very large. The technology sector is still focused on certain companies and has not yet experienced excessive exuberance. Most of the good varieties are companies related to data centers, cloud terminals, and semiconductor businesses. Customers must fully benefit from AI investments on the data center side. Overseas investments should be focused on computing power side companies, while domestic investments should relax performance and valuation tolerance.

How to find the way through change

　　Turbulent market conditions test the ability and determination of professional investors.

　　Jiang Cheng, co-chief investment officer of Zhongtai Securities Asset Management and general manager of the equity public investment department, believes that from the perspective of market sentiment, short-term market surges are reasonable, but forward-looking and accurate predictions are particularly difficult. Investors should aim to accumulate excess returns rather than trying to predict the short-term performance of the market. Overall, Jiang Cheng still holds a relatively positive attitude towards the market outlook.

　　Wang Xiaoming, founding partner and chief investment officer of Ruijun Asset, focuses on varieties with low valuations, growth, and defensive properties. It is a feasible investment method, whether in a bear market or a bull market.