Recently, the A-share market has experienced sustained volatility, with industrial trends and capital games interwoven.
Liu Li, fund manager of HuaShang Reform and Innovation Equity Fund at HuaShang Fund, stated that at the current juncture, short-term market fluctuations do not change long-term industrial logic. Investment should steer away from emotional noise and seek opportunities along two main lines: technological self-reliance and self-strengthening, and valuation value regression.
Since the third quarter, fund managers including Liu Li of HuaShang Reform and Innovation Equity have observed that previously strong directions in the technology sector have notably cooled down. Regarding future evolution, Liu Li believes that artificial intelligence technology is still undergoing rapid iteration and is expected to accelerate penetration in broader scenarios such as automated office work.
The intelligence level of domestic large models has improved significantly. Although there is still a gap compared with advanced overseas manufacturers, they can already meet the needs of diverse scenarios with outstanding cost-effectiveness, thus commercialisation is advancing rapidly. The domestic semiconductor industry may fully benefit from this round of infrastructure construction.
Especially against the backdrop of tight supply and demand in the global industrial chain, domestic substitution is expected to accelerate. Over the past year, the pace of domestic substitution in sectors such as semiconductor equipment, HBM, computing power chips, components and materials has clearly quickened.
Overall, this wave of domestic substitution is characterised by high difficulty and vast space. For enterprises with high R&D investment and high R&D conversion rates, it may represent a long-cycle industrial opportunity.
Beyond the technology main line, Liu Li also pays close attention to mispriced quality large-cap blue-chip targets and layout opportunities in the innovative drug sector within growth directions.
Liu Li stated that in the first half of this year, AI-related sentiment was highly heated, and non-AI sectors suffered from capital diversion, with share prices continuously weakening. In particular, some quality large-cap blue-chip targets declined indiscriminately, with valuations, institutional holdings and trading proportions all approaching historical extremes, and valuations already offering a strong margin of safety.
"From a medium-to-long-term perspective, this may be a good layout opportunity."
Among growth directions outside technology, Liu Li believes that the innovative drug sector has vast long-term space and high short-term prosperity. Previously, there were instances where share prices and fundamentals diverged. It is believed that with R&D delivery and overseas breakthroughs, quality enterprises may usher in value revaluation.
Data note: As of 30 September 2026, Liu Li has 10.2 years of securities industry experience, including 5.3 years of securities research experience and 4.9 years of securities investment experience. Funds managed by Liu Li: HuaShang Strategy Select Flexible Allocation Mixed Securities Investment Fund (20211026-20230105), HuaShang New Power Mixed Securities Investment Fund (20220519 to present), HuaShang Reform and Innovation Equity Securities Investment Fund (20230110 to present), HuaShang Digital Economy Mixed Securities Investment Fund (20240625 to present), HuaShang Leading Enterprise Mixed Open-End Securities Investment Fund (20250106 to present), HuaShang Sci-Tech Innovation and Entrepreneurship Select Mixed Securities Investment Fund (20251104 to present). For more information, please refer to fund prospectuses and other fund legal documents.
Risk warning: The fund manager undertakes to manage and operate fund assets with honesty, credibility, diligence and prudence, but does not guarantee that the fund will make a profit or guarantee minimum returns. When purchasing funds, investors should carefully read fund contracts, prospectuses and other fund legal documents. Investors are advised to choose products that match their risk tolerance and investment objectives. The above views are only judgments on the current market and do not constitute guarantees for future investment or investment advice. Markets carry risks, and fund investment requires caution.
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