The ChiNext Index has demonstrated strong performance recently, reaching its highest level in nearly a decade. Historically, the index has surpassed the 3500-point mark on two previous occasions. How does the current situation differ from those past instances? Is now still a good time to invest in the ChiNext Index?
Drivers of the Current Rally: Synergy Between Industrial Trends and Reform Policies
The core rationale behind the recent strength of the ChiNext Index is not merely speculative trading or thematic hype, but rather the result of high industrial prosperity materializing and the empowerment from significant reform policies. Regarding industrial trends, dual drivers from the energy storage and optical module sectors provide solid fundamental support. The ChiNext Index maintains a relatively balanced exposure to growth industries, with major sectors including electrical equipment, communications, and electronics. Against the backdrop of a global explosion in AI computing infrastructure, mass shipments of 800G optical modules and the accelerated commercialization of 1.6T products have led to full order books and rapid profit growth for leading optical communication companies within the index. Simultaneously, the coordination between computing power and electricity demand has spurred a surge in energy storage needs, further supported by energy security concerns, leading to continuous profit recovery in the energy storage sector. These two high-growth sectors collectively provide substantial earnings support for the index. In terms of policy catalysts, the deepening of reforms for the ChiNext market has been implemented, releasing ongoing institutional benefits. Last week, the "Opinions on Deepening ChiNext Reform to Better Serve the Development of New Quality Productive Forces" was released, introducing a series of new measures, including a fourth set of listing standards, pre-review of IPOs, and shelf offerings. Post-reform, the constituent stocks of the ChiNext are expected to be of higher quality and focus on more cutting-edge sectors. In the short term, the reform news boosts market sentiment and favors valuation repair for the index. From a medium-term perspective, the inclusion of more high-quality innovative enterprises will improve the index's quality. Long-term, the market is expected to further anchor itself to the theme of new quality productive forces, consolidating its core position within the growth style.
Same Level, Different Fundamentals
The ChiNext Index historically touched levels above 3500 points twice: during the 2015 mobile internet rally and the 2021 new energy rally. However, at the same index level, the current sector composition and valuation metrics differ significantly from the previous two periods. In June 2015, propelled by the "Internet+" frenzy, the ChiNext Index surged past 4000 points. Its rolling price-to-earnings ratio once approached a historical high of nearly 140 times, detaching from underlying industry fundamentals. The 3500-point level at the end of 2021 was built on extremely optimistic capacity expansion expectations within the new energy industry chain, where valuations were already fully, if not excessively, priced in. Following a peak in industry penetration rates and global monetary tightening, the market entered a period of valuation digestion and consolidation. Unlike the previous two peaks, the current rise of the ChiNext Index appears more rational and sustainable. On one hand, the index's sector structure is more balanced, supported by more solid profit growth. The composition of the ChiNext Index has evolved significantly, with "new quality productive forces," such as advanced manufacturing and new types of energy storage, now dominating its weightings. Furthermore, the current rally does not rely on a single industry chain as in the past but shows balanced development, with several major weighted sectors experiencing profit recovery, collectively making the ChiNext Index a preferred choice for capital. Concurrently, the current valuation level of the ChiNext Index is more reasonable. As of April 15, 2026, the index's rolling P/E ratio is approximately 43 times, situated at the 53rd percentile over the past decade, significantly lower than during the previous two rallies. This indicates a healthy upward phase where earnings growth is digesting valuations, suggesting greater sustainability for the current trend.
Outlook: Mid-Rally Potential Remains
The current rally appears to be in its mid-stage, with further potential. April is a peak period for the disclosure of annual reports and first-quarter reports, providing ongoing verification for the ChiNext's strength through earnings data. As external tensions ease and risk appetite further recovers, coupled with the institutional benefits from the implemented ChiNext reforms, the market's upward trend is expected to continue. Investors without stock trading accounts can consider the E Fund ChiNext ETF Link Fund (A/C/Y: 110026/004744/022907).
A bullish MACD crossover signal has formed, with several stocks showing strong upward momentum.
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