In November, brokerage strategy conferences are being held intensively, focusing on the outlook for the A-share market next year.
According to a preliminary review, CITIC Securities, CITIC Construction Investment, Huatai Securities, Shenwan Hongyuan and others have recently held their 2027 investment strategy meetings.
At these meetings, the topics that brokerages focused on regarding the A-share market included: Will the current market adjustment continue into next year? Will A-shares still offer structural opportunities next year, and what will the market trend be for the full year?
Overall, several leading brokerages have all expressed optimism about A-share investment opportunities next year.
For example, CITIC Securities believes that in 2027, structural turning points in A-shares will increase, and the market will show a "K-shaped convergence" characteristic.
CITIC Construction Investment stated that the market may show an "N-shaped" trend, during which three peaks will appear: the policy high point at the end of the first quarter, the earnings low point at the end of the second quarter, and the valuation high point at the end of the fourth quarter.
Next Year's Macro Economy: "Recovery Amid Fluctuations"
At the macroeconomic level, several brokerage chief economists believe that next year the macro economy will recover amid fluctuations, with infrastructure investment and consumption marginally warming up, providing support for the A-share market.
Combining this with external markets, CITIC Construction Investment Chief Economist Huang Wentao analyzed that in 2027, the Middle East conflict still carries risks of recurrence; in the first quarter of next year, PPI is expected to remain at a relatively high level, then fall sharply.
Regarding the interest rate environment, it is expected that the combination of real interest rates in China and the US may show a phased characteristic of first diverging and then converging.
"The easing of the global liquidity environment is particularly critical for the market to turn bullish," he said.
Based on this, Huang Wentao predicted that in 2027, A-shares will usher in a handover year of "earnings decline plus discount rate decline." Under the migration and switching of pricing anchors, A-shares are expected to see wide-ranging fluctuations and structural opportunities.
At the capital level, insurance funds, as the core source of incremental capital, may drive the dividend style to remain strong.
Regarding the overall situation of China's economy next year, CITIC Securities Chief Economist Ming Ming believes that China's economy will show a "recovery amid fluctuations" trend.
He analyzed that the current global economy shows obvious "K-shaped divergence," with developed countries carrying high debt and persistently high inflation, while US employment is weakening but the AI capital expenditure boom has not stopped.
Based on this, he predicted that in 2027 China's real GDP growth rate will be around 4.5%, infrastructure investment and consumption will marginally warm up, new quality productive forces will continue to gain momentum, export growth may slow, and economic structural divergence is expected to marginally converge; in terms of policy, fiscal policy will maintain moderate expansion, and there is still room for RRR cuts and interest rate cuts; in terms of exchange rates, the RMB exchange rate is expected to continue moderate appreciation.
So, what supports economic growth in 2027? Huatai Securities Chief Macro Economist Yi Huan believes that supporting factors come from three aspects: new economic development, expansion of AI-related capital expenditure, and resilience of external demand.
Huatai Securities predicts that China's real and nominal GDP will grow by 4.6% and 5.8% respectively in 2026, and by 4.5% and 5.2% respectively in 2027; against the backdrop of relatively rapid growth in overseas AI capital expenditure and high global manufacturing prosperity, China's USD-denominated exports are still expected to achieve double-digit growth in 2027.
Investment Opportunities May Be Better in the Second Half of Next Year
Based on the above macroeconomic forecasts, brokerages generally believe that the A-share market next year will still have structural opportunities.
"The market adjustment has already occurred earlier this year. In 2027, K-shaped convergence will continue, returning to value, and the breadth of the market will expand," said CITIC Securities Chief Strategist Bao Chengchao. "K-shaped convergence and expanded market breadth" may be the most important market characteristics of 2027.
CITIC Securities also mentioned in a recent research report that looking ahead to 2027, at a point when expectations are generally cautious, the breadth of the market will instead expand next year; the process of valuation contraction in most sectors has basically been completed this year; AI investment may slow down, but its crowding-out effect on other non-AI industries will decline.
"The clearing of capital conditions requires time, and investors will gradually return to reasonable return expectations," he said. Market expectations are moving forward in a mid-to-high rotation environment. Stable-return strategies represented by PB-ROE (price-to-book ratio–return on equity) are relatively superior to prosperity strategies, and style may shift.
In terms of allocation, he believes it is necessary to moderately diversify investments and respond around four clues: stable returns, excellent overseas manufacturing, domestic demand repair, and new AI technologies and applications.
He also mentioned that next year the technology sector will show internal divergence, while non-AI sectors have broad structural repair opportunities.
Regarding the full-year trend of A-shares next year, CITIC Construction Investment believes it may show an "N-shaped" trend.
Specifically, the first quarter is an earnings vacuum period, and the pricing anchor is policy expectations and market risk appetite; in the second quarter, inflation is likely to peak and fall back, earnings begin to be revised downward, and the pricing anchor returns to the numerator side for that year; in the third quarter, inflation constraints are expected to be lifted, the Fed's pivot is confirmed, and the pricing anchor switches to the denominator; in the fourth quarter, the third-quarter report is released, the perspective turns to the following year, and the pricing anchor switches to 2028 prosperity and earnings.
"The migration and switching correspond to the three peaks of the full-year N-shaped trend: the policy high point at the end of the first quarter, the earnings low point at the end of the second quarter, and the valuation high point at the end of the fourth quarter," the institution said.
Shenwan Hongyuan also predicted next year's market trend, believing that March to April next year may be a period of oversold rebound.
"A-shares are still operating within the framework of the 'two-stage major wave rally,' and the market is currently in the adjustment stage between the two bull market stages," said Fu Jingtao, head of the allocation research team at Shenwan Hongyuan Research Macro Allocation Research Center.
He mentioned that before the spring rally ends in 2027, it may be a window in which an oversold rebound unfolds and A-shares generally no longer make new lows; after the spring rally ends, this round of adjustment may reach the absolute bottom area, and the second half of 2027 is expected to see the construction of a "second-stage rise."
He also expects that in 2027 the market may see a turning point from a headwind of asset allocation environment, industry trends, and capital supply-demand resonance to a tailwind of resonance, and full-year investment returns may be no weaker than in 2026, with investment opportunities in the second half likely significantly better than in the first half.
Comments