Guosen Securities: How to view the trend of A shares in the future?

Wang Han, chief economist of Guotai Junan Securities, believes that there are three core pillars supporting the current capital market trend in China: the disruption of economic globalization under a hundred-year transformation, the historic elevation of the positioning of the capital market since the 20th century, and the boost in risk appetite brought about by strategic adjustments towards the United States. Before these three core pillars undergo a systemic change, the underlying logic of the trend in the market remains solid. Looking at the evolution of the market trend, the current market is in the first stage of being "valuation-driven", with the three core themes being hard power, technology pushing back, and leading manufacturing companies expanding globally. After the market confirms the prospects of China leading the deepening development of globalization, the trend will shift to a "fundamental-driven" stage, where various sectors will develop around the improving fundamentals following the enhancement of global discourse, presenting a "variety of flowers blooming" characteristic. From the current assessment of the market trend, overall market valuations are reasonable, market capitalization does not match economic status, investor sentiment is stable, institutional holdings are diversified with no stampede risk, and the transition from the bond market to the stock market and foreign capital inflows provide significant potential for incremental funds. Therefore, the market should be in the process of transitioning to the "valuation-driven" stage, with manageable systemic risks for a market transformation.