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.

Byline: 毛艺融

Recently, although volatility in global financial markets has increased, Chinese assets are showing unique resilience and allocation value. Multiple institutions believe that, thanks to China’s diversified energy mix, a complete industrial system, a stable economic and social environment, and the ongoing deepening of capital market reforms, the allocation value of Chinese assets amid global fluctuations has become increasingly prominent. The foundation for A-shares to remain structurally favorable over the long term is still solid, and structural opportunities are accelerating.

Looking globally, multiple international institutions, including Goldman Sachs and UBS, have already clearly stated bullish stances. In a fresh view released on March 31, Liu Jinchun, Goldman Sachs’ Chief China Equity Strategy Analyst, said it will continue its strategy of increasing holdings in 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 for the A-shares and H-shares markets in 2026 could reach 10%. This expectation is supported by factors including artificial intelligence, “going global,” and “anti-involution” policy measures.

Fundamental drivers bolster confidence

Against the backdrop of widespread pressure on global risk assets in the near term, China’s stock market has shown positive changes in fund flows. Zhang Yu, Chief Economist at Huachuang Securities, said that recently, amid global risk assets generally being sold off, China’s stock funds still bucked the trend by recording 690 million USD in net inflows for the week (from March 19 to March 25, the same applies below). Foreign capital and passive funds have become the main support. Overseas funds posted a substantial net inflow of 1.38 billion USD for the week, and together with the 980 million USD return of passive funds, they jointly formed the micro fund flow structure of China’s stock fund market, creating a support force. This phenomenon indicates that Chinese assets are continuing to enter global investors’ allocation view.

Fang Yi, Chief Strategy Analyst at Cathay Haitong Securities, said that stability is the underlying tone of China’s economy and stock market. China has the world’s most complete industrial system; the added value of manufacturing accounts for roughly 30% of the global share. The manufacturing system of “full industrial chain + efficient logistics + controllable costs” is upgrading from being merely a “cost advantage hotspot” into a “stability anchor” in global supply chains. In past global risk events and demand shocks, China’s manufacturing industry has consistently demonstrated strong resilience.

In addition, the improvement of China’s market-stabilizing mechanisms with Chinese characteristics enhances the stock market’s ability to withstand risks. Coupled with the risk-dispersion value brought by China’s assets’ low correlation with global assets, it is expected to attract global capital. “In our recent communications with overseas long-term capital, we learned that foreign investors are重新审视China’s rise and industrial advantages,” Fang Yi said.

Yang Chao, Chief Strategy Analyst at Galaxy Securities, told reporters from Securities Daily that in the first year of the “Fifteenth-Five” (2026) reform initiatives are being implemented steadily, and a resonance is being formed between residents moving wealth and long-term funds entering the market, with improved supply of medium- and long-term funds having certainty. As A-share companies’ 2025 annual reports and the 2026 first-quarter reports are集中披露, sectors with high earnings certainty and continuously improving business conditions will become the core direction for fund focus. Data show that from January to February 2026, profits of industrial enterprises above designated size nationwide grew by 15.2%. Structurally, profit growth is more明显 in upstream and midstream raw materials and AI hardware manufacturing industries. The profit growth momentum of emerging technology is expected to further raise the profit center of gravity.

“China’s corporate fundamentals are presenting a sustained trend toward improvement. Export structures continue to upgrade, and enterprises in high value-added areas show clear momentum. Chinese companies are accelerating their move to the world, and overseas revenue is expected to become a new engine for profit growth,” Li Changfeng, head of market strategy at AB Bernstein Fund, said in an interview with Securities Daily reporters.

AI and energy transition become the main lines

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

From the perspective of valuation and value-for-money, quality technology assets already have strong allocation appeal. The latest view released by UBS Wealth Management’s Office of the Chief Investment Director shows that the market adjustment may have been overdone, and investors have the opportunity to increase positions in high-quality China AI stocks at lower valuations. China’s internet industry’s 12-month forward P/E is around 13x, which is close to the level before DeepSeek was released. The current valuation has not yet fully reflected the returns brought 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%, and that profit growth in the technology sector could reach 20% to 25%. At the same time, policies continue to support AI development and technological innovation. As fundamentals keep improving, earnings, valuation, and positioning are also expected to gradually rebound.

Looking further ahead, a re-rating of the valuation of Chinese assets is also an important positive factor. “The logic for re-rating Chinese assets driven by capital market reform in this cycle is not changed as the foundation for the long-term development of the market,” Xia Fanji, a China investment strategy analyst at Citic Securities, said.

In Liu Chenming’s view as Chief Strategy Analyst at GF Securities, the regulatory authorities’ multi-dimensional and sustained policy signals have formed a synergy—such as on March 18, when the Party Committee of the People’s Bank of China held an expanded meeting to further emphasize “firmly maintaining the stable operation of financial markets such as stocks, bonds, and foreign exchange.” The structural advantages and policy support for Chinese assets still have resilience. The valuation safety cushion provides protection from the bottom. Industrial upgrading and policy dividends provide upward driving force, and safety advantages stand out in the global reallocation of assets.

Goldman Sachs believes that artificial intelligence will continue to be the leading theme in China’s stock market. In particular, across the globe, China has competitive advantages in areas including power, infrastructure, and artificial intelligence, as well as supply chains and large language model domains related to national security. After adjustment, A-shares and H-shares are expected to perform steadily, providing investors with unique value for risk dispersion.

Li Changfeng also mentioned that whether it is China’s companies as “shovel sellers” for AI infrastructure or “users” for AI applications, they are actively laying out plans. China’s relatively stable power infrastructure buildout provides a good development space for the AI industry ecosystem, and demand for China’s AI tokens is surging significantly.

In fact, with a complete supply-chain system, 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 China International Capital Corporation (CICC), said that in the future, the security attribute of Chinese assets will be increasingly favored by global capital.

(Edited by: 文静)

Keywords:

                                                            A股
                                                            assets