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On July 21st, Wang Sheng, General Manager of the Research Institute and Chief Strategist at Shenwan Hongyuan Group Co., Ltd., shared his views in an interview. He emphasized that the earnings resilience of the A-share market is notably strong, and the technology sector possesses immense potential for growth. This progress is expected to enhance China's global standing in science and technology during the era of artificial intelligence.
Addressing the recent market correction, Wang Sheng noted its significant correlation with volatility in global markets. For instance, the U.S. Philadelphia Semiconductor Index experienced a substantial pullback. The South Korean market also saw pronounced fluctuations due to high leverage and the prior significant gains in memory chip company stocks. Additionally, the Japanese market exhibited considerable volatility, linked to concerns over periodic yen appreciation. Consequently, the accumulation of these external risks has led to a phase of heightened market instability, which has indirectly impacted domestic capital markets.
Wang Sheng characterized the current A-share adjustment as technical in nature. He pointed out that a portion of large-cap value and growth stocks had already undergone substantial correction earlier, bringing their valuations to very reasonable levels. Recently, profit growth expectations for these companies, such as some baijiu and innovative pharmaceutical firms, have been revised upwards. Therefore, following the correction in technology stocks, the broader market is well-positioned for a coordinated rebound.
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