The A-share market has recently experienced a broad-based recovery, with the ChiNext Index climbing steadily. As late April approaches, what performance can be expected from the market?
Analyses from ten major securities firms indicate that the majority believe the upward momentum in Chinese stocks is far from over. Among these, the ChiNext Index is still considered the most attractive sector within the A-share market, and its outperformance may persist.
Guotai Haitong Securities stated that the rising trend in Chinese equities has not yet concluded, suggesting the market could reach new highs. External disruptions projected for 2026 are expected to highlight the strengths of China's industries. Whether in technological advancement or globally expanding manufacturing, the international community is likely to reassess and revalue Chinese assets. The Chinese stock market is not expected to stall; confidence should be maintained.
Regarding the recent strong performance of the ChiNext Board, CITIC Securities noted that considering the growth potential of its heavyweight constituents in computing power and new energy, along with the index's still-low valuation levels, the ChiNext Index remains the most cost-effective investment direction in A-shares.
Shenwan Hongyuan Securities further pointed out that in the short term, the gains of tech leaders with better-than-expected earnings align with the degree of valuation absorption by those earnings. This suggests room for short-term attractiveness while medium-term appeal remains stable. The ChiNext Board's leading trend may therefore continue for some time.
However, Huatai Securities cautioned investors that short-term market movements might face some volatility. On one hand, global risk appetite could see a periodic decline. On the other hand, the A-share valuation dispersion coefficient has reached a historically high range, increasing profit-taking pressure in crowded trades and potentially leading to a phase of style rebalancing.
Regarding investment strategy, Zhejiang Securities advised that for the ChiNext Index and related assets, investors could reference the performance of overseas comparable assets and incorporate institutional trading sentiment and crowding indicators to formulate strategies. For other assets, it is suggested to use the Shanghai Composite Index as an anchor, treating it as range-bound. When the market pulls back after a rally, forming a "golden right foot" pattern, opportunities may arise in previously oversold, high-beta sectors.
CITIC Securities highlighted that the current process of position rebuilding is not yet complete. While market sensitivity to geopolitical events has diminished recently, the strength of reversal factors during this recovery phase has been noticeably weaker than in past cycles, with sector focus narrowing significantly.
Concerning first-quarter reports, companies that have disclosed results show profit elasticity significantly exceeding revenue elasticity, with margin improvement being a common theme. The technology and cyclical sectors demonstrated particular strength, with "China's advantaged manufacturing, AI infrastructure, and non-bank financials" being the three main drivers of Q1 growth.
Reviewing historical industry cycles, turning points in market trends have typically coincided with price inflection points in the tightest supply-demand segments. For the current North American AI hardware cycle, key variables to watch include DRAM, indium phosphide, fiberglass, and gas turbines.
From an allocation perspective, the fundamental logic for portfolio construction remains centered on the revaluation of China's manufacturing advantages.
Guotai Haitong Securities reiterated that the upward momentum in Chinese stocks is far from over, anticipating new highs ahead. Post-2024, concerns over domestic issues have lessened. The anticipated external disruptions in 2026 represent a significant inflection point, reflecting China's industrial strengths. International reassessment and revaluation of Chinese assets are expected across technology and global manufacturing expansion.
Furthermore, with the clarification of risk boundaries and constraints, market uncertainty has decreased, expectation downgrades have largely concluded, and the market has returned to its endogenous development logic. Recent acceleration in capital market reforms implies a policy stance aimed at consolidating stable, positive market conditions. A clearer bottom is expected to strengthen the rise in social asset management demand and incremental capital inflows against the backdrop of declining risk-free returns.
Additionally, anticipated fiscal stimulus and rising inflation in 2026 should lead to a gradual stabilization of traditional industries. Faced with vast market demand and the significant computing power gap with the US, investment in China's emerging industries is also expected to accelerate. Moreover, as China's competitive manufacturing sector expands globally, the emergence of multinational corporations and improved ROE could lead to upward revisions in China's 2026 growth expectations. The Chinese stock market is unlikely to pause; confidence is warranted.
In terms of allocation, emerging technology remains the main theme, but value sectors may also see a resurgence.
Huatai Securities suggested that short-term market trends might face disturbances. With a two-week ceasefire window expiring soon and hearings for the nominated Fed Chair Warsh, global risk appetite could see a temporary pullback. Concurrently, high A-share valuation dispersion and profit-taking pressure in popular trades increase the possibility of a short-term style rebalancing.
For allocation, controlling position sizes and rotating within high-growth themes is advised. While the computing power industry trend remains intact, it faces short-term profit-taking pressure. Attention could shift to less crowded growth areas like the new energy chain and export-related sectors.
CITIC Securities maintained that the ChiNext Index is still the most attractive direction in A-shares. With recent geopolitical negotiations on the agenda and a global market rebound underway, the main offensive thrust in A-shares is concentrated on the ChiNext Board. Despite the index surpassing its previous bull market high, doubts remain among investors about its further upside potential.
Considering the growth potential of its heavyweight stocks in computing and new energy, coupled with its low valuation, the ChiNext Index continues to offer the best value.
For industry allocation,挖掘 (exploring) sectors with strong Q1 performance is recommended, focusing on areas like new energy, energy storage, lithium battery materials, AI computing, innovative drugs, semiconductors, and consumer sectors.
Galaxy Securities advised focusing on structural allocation opportunities. While geopolitical negotiations may seesaw, and uncertainty around international oil prices persists, domestic economic resilience, rebounding inflation, and the growing attractiveness of RMB assets collectively form the core support for the medium-term trajectory of A-shares.
Late April is a critical period for the密集 (intensive) disclosure of annual and Q1 reports, serving as a key window to verify profit recovery, making it a time to watch for structural opportunities.
These opportunities include: 1) The certain trends of technological innovation, self-sufficiency, and industrial prosperity, focusing on core segments with high performance visibility, such as power equipment, energy storage, memory, semiconductors, computing power, and communication equipment. 2) Resource sectors benefiting from the year-on-year turnaround in PPI and rising price levels, including non-ferrous metals, basic chemicals, petroleum and petrochemicals, building materials, and steel. 3) Themes related to energy and alternative demand arising from反复 (repeated) geopolitical conflicts, alongside defensive sectors, focusing on coal, coal chemicals, new energy, finance, and utilities. Additionally, the consumer sector's valuations are at historically low levels, with some sub-sectors offering room for expectation repair, suggesting attention to agriculture, food & beverage, and home appliances.
Shenwan Hongyuan Securities reiterated that the ChiNext Board's outperforming trend may have further room to run. Mid-term scenarios for overseas conflicts are converging,充分验证 (fully validating) the judgment that "the worst is passing." The mid-term market view is reaffirmed: a return to a "two-stage rising market," with A-shares currently in a consolidation phase after the "first stage rise." This market bottom also represents a (small-cap growth) "style bottom." High-flying tech stocks with new growth validation continue to lead, while small-cap growth and strategic resources are experiencing a "slow start."
Historically, during consolidation phases between the two rising stages, high-elasticity opportunities mainly stem from extensions of the tech industry主线 (main theme) and expansions of macro narratives. However, sector linkage is weak during this stage, with a few sectors often performing independently. Short-term catalysts like validation of computing and storage sector growth, coupled with the renewed outperformance of US tech stocks, are driving the ChiNext's independent performance.
The pattern of structural行情 (market moves) during this phase follows: industry growth validation; stock price increase and valuation expansion; reduced short-term attractiveness while medium-term valuation constraints emerge; trend stagnation, sideways consolidation, awaiting a major catalyst to determine direction.
Short-term gains in tech leaders exceeding earnings expectations match the degree of valuation absorption by earnings. This implies short-term appeal remains, while medium-term attractiveness is unchanged. The ChiNext's dominant trend may therefore persist.
Structural recommendations remain consistent. Tech sectors focused on "reality" that were strong before the latest geopolitical conflicts have strong short-term upward momentum, with focus on optical communication, gas turbines, and energy storage. In the next phase, new energy, new energy vehicles, and export chains may see increasing growth validation. The strategy of "buying growth" in these directions may prove significantly more effective than "buying hedges."
China Merchants Securities indicated that the overall market valuation repair might already be complete. Since April, with easing expectations for geopolitical disruptions and recovering risk appetite, various assets have rebounded, but overall market valuation restoration may have peaked. A sharp rise in oil prices is less likely due to eased tensions and supplemented supply, but low inventories remain a constraint. US inflation is expected to stay above 3% for the year, narrowing the window for rate-cut trades and shifting market logic towards fundamental drivers.
Supported by steady economic growth and a safety premium, A-shares are likely to attract foreign capital回流 (backflow). The market style may shift from growth dominance to balance. In the medium to long term, a PPI recovery could strengthen value styles.
For sector allocation, the focus remains on areas with high Q1 growth, such as new energy, non-ferrous metals, petrochemicals, and semiconductors.
Zhejiang Securities advised patience等待 (waiting) for the "golden right foot" formation. The market's narrowing focus has created a "dual structure." For the ChiNext Index and related assets, strategies can be formulated by referencing overseas comparable assets and considering institutional trading willingness and crowding indicators. The ChiNext Index (especially its heavyweights) has become one "unit" of the market, breaking through technical resistance and forming a five-wave weekly pattern.
Reviewing the "systematic slow bull" market since late 2024, the market has been in a process of "narrowing focus" from a "systematic rise" to "structured行情," culminating in the current "dual structure." Based on this assessment, strategies for the ChiNext should consider overseas counterparts and institutional metrics.
For other assets, using the Shanghai Composite as an anchor and viewing it as range-bound is suggested. When the market pulls back after a surge, forming a "golden right foot," participation using previously oversold, elastic sectors is advisable.
Additionally, Hong Kong tech stocks, securities, and some sufficiently corrected innovative drug stocks could be considered as "alternatives" for buying on dips, serving as options to hedge upside risk or replenish positions.
Industrial Securities suggested that more outperforming directions within the tech sector are likely to emerge. As geopolitical issues enter negotiation phases and the domestic Q1 earnings season begins, bottom-up growth cues are expected to gradually replace top-down geopolitical macro influences as the primary pricing factor for the market. A consensus is forming to embrace growth, and more high-performing areas within the tech sector are poised to show strength.
Looking ahead, as the Sino-US earnings disclosure period continues into April-May, the tech sector's growth prospects are expected to receive further validation and catalysts from financial reports, which is a core reason for optimism regarding the sustainability of this tech sector recovery.
Furthermore, the macro environment and industry catalysts in April-May should provide a favorable window for tech sector allocation, meaning the recent valuation repair logic will likely find continued support.
Huaan Securities expressed a view of持续向好 (continued improvement) for the market. Excessive worry about external disturbances like overseas conflicts is unnecessary. Following a 5% Q1 GDP growth "good start," the upcoming Politburo meeting is expected to continue signaling support for the economy and fostering a宽松 (accommodative) atmosphere, though the probability of incremental policies is low. Overall, risk preference is stable with an upward bias, supporting continued market improvement.
For allocation, a full shift towards elastic assets is recommended, with the broad AI industry chain centered on computing power and its supporting infrastructure as the undisputed primary choice, whose outperformance is expected to become more pronounced. Additionally, sectors benefiting from price increases, such as the energy storage chain, machinery equipment, memory, semiconductor equipment, and the defense sector, which often reflects ChiNext sentiment, represent definite opportunities and warrant attention.
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