Brokerage Chiefs Say Market Adjustment Leaves A-Share Fundamentals and Long-Term Value Intact

Highlights

Several brokerage chief economists and analysts say the recent A-share market adjustment reflects overseas volatility and shifts in investor sentiment more than a deterioration in domestic fundamentals. They believe much of the associated risk has already been priced in, while economic indicators, corporate earnings and industrial activity show signs of improvement. Longer term, the market’s value will depend on the interaction between stronger company profitability and technological and industrial innovation. The analysts’ central argument is that earnings delivery and rising industrial capability—not a short-lived rebound in sentiment—form the basis of lasting market value.

Sentiment Analysis

• Overall tone: Cautiously constructive. The analysts acknowledge significant near-term volatility and external risks, but generally view the adjustment as a repricing rather than evidence that the long-term outlook has broken down.
• Sources of concern: Geopolitical tensions, fluctuations in overseas financial markets, lower global risk appetite and uncertainty about returns on artificial-intelligence investment have weighed on sentiment. The article also recognizes that changing expectations for global technology supply and demand can influence valuations.
• Reasons for optimism: The commentators point to improving economic and profit indicators, resilient activity in selected industries and the continued development of advanced manufacturing and technology. They say that prior declines have already reflected many negative factors.
• Qualification: The article does not claim that volatility is over or that every sector will perform well. Its outlook is conditional on continued earnings recovery, investment and innovation translating into measurable results.

Article Text

China Securities Regulatory Commission Chairman Wu Qing said at the 2026 Financial Street Forum annual meeting that the foundations and long-term trends supporting China’s economy remain strong. He also said that the underlying logic of capital-market performance has changed significantly and that the allocation value of Chinese assets has become more evident. In interviews with the Shanghai Securities News, several brokerage chief economists and analysts offered a related assessment: recent weakness in the A-share market reflects external shocks and swings in sentiment, while the medium- and long-term outlook remains tied to economic fundamentals, recovering corporate earnings and industrial innovation.

The analysts attributed much of the adjustment to developments outside China and changes in expectations. Guan Tao, chief economist at Huafu Securities, pointed to heightened geopolitical tensions and differing views about the course of overseas technology stocks. Wang Han, global chief economist at Industrial Securities, cited volatility in overseas financial markets, a decline in global risk appetite and changing expectations for returns on artificial-intelligence investment. He said the market had undergone a substantial adjustment and that pessimism had been released to a considerable extent.

Guo Lei, chief economist at GF Securities, said global pricing pressures had already been reflected and were gradually easing. He identified higher overseas interest-rate benchmarks, geopolitical disruptions and changing expectations for supply and demand in the AI industry chain as factors behind a broader adjustment in global risk assets. Cheng Qiang, head of the research institute and chief economist at De邦 Securities, said that after a sustained pullback, overall A-share valuations had returned to a reasonable range. In his view, many of the negative concerns that weighed on prices have already been incorporated, leaving relatively limited room for a further decline in the index.

Economic and corporate data provide context for this assessment. National Bureau of Statistics figures show that the economy grew 4.6% year on year in the first three quarters, with growth of 4.5% in the third quarter. Wang noted that nominal GDP growth recovered during the first three quarters. From January to August, profits at industrial enterprises above designated size increased 15.7% year on year, while manufacturing profits rose 17.4%. He said the figures indicate that improving prices and industrial upgrading are jointly supporting a recovery in corporate earnings.

Reported results also point to growth among a portion of listed companies. As of October 22, 232 A-share companies had disclosed third-quarter reports. Their operating revenue and net profit attributable to parent companies rose 15.2% and 16.2%, respectively, year on year, and 138 of those companies recorded year-on-year growth in attributable net profit. These results do not establish that all listed companies or industries are improving, but they provide evidence that earnings growth is continuing across a number of businesses.

Export and industry indicators offer further signs of activity. Song Xiaoxiao, chief analyst for macroeconomic research at Changjiang Securities, said September exports measured in U.S. dollars rose 36.3% year on year. She highlighted strong activity and rising prices across parts of the AI supply chain, including automatic data-processing equipment and components, as well as integrated circuits. October freight rates and container-export indicators across 20 ports also remained strong, according to the article.

The analysts identify corporate profitability and industrial innovation as the main foundations of A-share value over a longer horizon. Chen Li, assistant president, chief economist and head of the research institute at Chuancai Securities, said technological innovation is moving from isolated breakthroughs toward broader, coordinated progress. He added that domestic capabilities in key technologies are strengthening, while listed technology companies serve as important channels for converting research into practical applications. In his account, stronger technological capacity and improvements in listed companies can reinforce one another.

Zhang Yu, chief economist at Huachuang Securities, described manufacturing as moving from an emphasis on cost advantages toward a premium based on capabilities. She identified midstream manufacturing as a relatively clear industrial development theme for the next two to three years. By the first half of this year, A-share listed midstream equipment manufacturers had recorded double-digit operating-profit growth for six consecutive quarters. Their overseas business gross margin reached 23.1%, compared with 19.4% in 2021.

Cheng said that in computing-power supply chains, advanced equipment, technological self-reliance and overseas expansion in new energy, order conversion, capital expenditure and earnings delivery remain steady. He argued that the broader industrial uptrend has not fundamentally changed and that profit growth can itself support valuation recovery. September data showed infrastructure and manufacturing investment beginning to recover, while October EPMI data exceeded seasonal levels, suggesting that improvement was continuing.

The article’s overall conclusion is that stronger industrial competitiveness and higher value added can improve profit margins and returns on equity, supporting a rising share of new-economy companies in market capitalization and a higher long-term index center. In this view, sound market institutions provide the environment, while innovation and industrial progress provide the earnings; their interaction is what can make long-term A-share value more durable.

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