Institutions clearly maintain a bullish stance. Goldman Sachs analysts expect the overall profit growth rate of A-shares and H-shares to reach 10% by 2026.

By our reporter, Mao Yirong

Recently, although volatility in global financial markets has increased, Chinese assets are showing unique resilience and investment allocation value. Multiple institutions believe that, by leveraging a diversified energy structure, a complete industrial system, a stable economic and social environment, and ongoing deepening of capital market reforms, the allocation value of Chinese assets in global volatility is becoming increasingly prominent. The foundation for A-shares’ long-term positive trend remains solid, and structural opportunities are accelerating.

Looking at the world, multiple international institutions, including Goldman Sachs and UBS, have already clearly stated a bullish stance. Goldman Sachs Chief China Equity Strategy Analyst Liu Jinjìn published his latest views on March 31, stating that he will continue to pursue a strategy of increasing holdings of A-shares and H-shares. Benefiting from Chinese companies’ efforts to continuously improve return on net assets for shareholders, cash returns, and the improvement in earnings per share of A-shares, it is expected that the overall profit growth rate of the A-share and H-share markets in 2026 could reach 10%. This expectation is supported by factors including artificial intelligence, “going global,” and “anti-involution” policy measures.

Fundamental Support Builds Confidence

Against the backdrop of broad pressure on global risk assets in recent times, China’s stock market has shown positive changes in its funding structure. Zhang Yu, Chief Economist at Huachuang Securities, said that recently, amid global risk assets being widely sold off, China’s stock funds, however, achieved a net inflow of $690 million in a single week (March 19 to March 25, the same below), bucking the trend. Foreign capital and passive funds have become the main backstopping forces. Overseas capital saw a large net inflow of $1.38 billion in a single week; together with the return of $980 million of passive funds, it jointly formed the micro-level funding structure of China’s stock fund market, creating the backstopping force. This phenomenon indicates that Chinese assets are continuing to enter global investors’ allocation view.

Fang Yi, Chief Strategy Analyst at Cathay Haitong Securities, believes that stability is the baseline color of China’s economy and stock market. China has the world’s most complete industrial system; manufacturing value added accounts for about 30% of the global share. The manufacturing system of “full industrial chain + efficient logistics + controllable costs” is upgrading from a mere “cost advantage” to a “stability anchor” in global supply chains. In repeated global risk events and demand shocks, China’s manufacturing sector has demonstrated strong resilience.

In addition, the improvement of China’s distinctive market-stabilizing mechanism enhances the stock market’s ability to withstand risks. Coupled with the risk-distribution value arising from Chinese assets’ low correlation with global assets, it is expected to attract global capital. “In our recent communications with long-term overseas capital, we learned that foreign investors are re-examining China’s rise and its industrial advantages.” Fang Yi said.

Yang Chao, Chief Strategy Analyst at Galaxy Securities, told reporters from The Securities Daily that, in the opening year of the “15th Five-Year Plan and the 5th Five-Year Plan” reform initiatives, measures are being implemented steadily. A resonance is formed between the movement of residents’ wealth into investment (“wealth relocation”) and long-term capital entering the market, and the improvement in the supply of mid- to long-term capital has certainty. With A-share companies’ 2025 annual reports and 2026 Q1 reports being released in a concentrated manner, sectors with high earnings certainty and sustained improvement in business conditions will become the core direction that capital focuses on. Data show that from January to February 2026, profits of industrial enterprises above designated size nationwide grew by 15.2%. Structurally, profit growth has been more明显 in upstream and midstream raw materials and in AI hardware manufacturing. The profit growth “center of gravity” for emerging technologies is also expected to rise further.

“China’s companies’ fundamentals are showing a sustained trend of improvement. Export structures are continuously upgrading, with strong growth momentum in companies in higher value-added segments. Chinese companies are accelerating their move onto the world stage, and overseas revenue is expected to become a new engine for profit growth.” Li Changfeng, Head of Market Strategy at ABF Fund, said in an interview with reporters from The Securities Daily.

AI and Energy Transition Become the Main Lines

Multiple institutions generally believe that China’s economic transition and active industrial progress are the fundamental drivers of the sustained and steady development of China’s stock market. Among them, artificial intelligence and the energy transition are the two core main lines, and structural opportunities in related areas are accelerating their release.

From the standpoint of valuation and value for money, high-quality technology assets already have strong allocation appeal. In its latest views, UBS Wealth Management’s Office of Investment Director shows that the current market adjustment may already be overly priced-in, giving investors an opportunity to increase holdings of high-quality China AI stocks at lower valuations. China’s internet industry currently has a 12-month forward price-to-earnings ratio of about 13x, which is close to the level before DeepSeek was released. The current valuation has not yet fully reflected the returns generated by AI investment and monetization over the past year. It is expected that the MSCI China Index’s EPS (earnings per share) growth this year will be about 13%, with the technology sector’s profit growth expected to reach 20% to 25%. At the same time, from the policy level, support for AI development and technological innovation remains in place. As fundamentals continue to improve, earnings, valuations, and positions are also expected to gradually rebound.

Looking further ahead, a reassessment of the valuation of Chinese assets has also become an important positive factor. “The logic of re-rating Chinese assets driven by capital market reforms in this cycle has not changed.” Xia Fanjiang, an investment strategy analyst at CITIC Securities, said.

In Liu Chenming’s view, Chief Strategy Analyst at GF Securities, coordinated efforts are formed by the regulator’s multi-dimensional, sustained policy signals. For example, on March 18, the Party Committee of the People’s Bank of China held an expanded meeting, further emphasizing the “firm maintenance of the smooth operation of financial markets such as stocks, bonds, and foreign exchange.” The structural advantages of Chinese assets and policy support still have resilience. The valuation safety cushion provides bottom protection; industrial upgrading and policy dividends provide upward momentum. In the global reallocation of assets, China’s safety advantages stand out.

Goldman Sachs believes that artificial intelligence will continue to be the leading theme in China’s stock market. In particular, on a global scale, China has competitive advantages in areas including power, infrastructure, and artificial intelligence, as well as supply chains and large language model areas related to national security. After adjustment, A-shares and H-shares have shown steady performance, providing investors with a unique value for diversifying risk.

Li Changfeng also mentioned that whether they are “shovel sellers” in AI infrastructure or “users” of AI applications, Chinese companies are actively laying out plans. China’s relatively stable power infrastructure development provides ample room for the development of China’s AI industry ecosystem, and demand for China’s AI tokens is surging sharply.

In fact, by virtue of a complete supply chain system, a stable macro environment, and ongoing structural reforms, Chinese assets are gradually becoming an important direction for global capital seeking certainty. Zhang Jundong, a macro analyst in the Research Department of CICC, said that in the future, the safety attributes of Chinese assets will increasingly win global capital’s favor.

(Editor: Wen Jing)

Keywords:

                                                            A股
                                                            assets