In 2026, A-shares are generally considered to be still a bull market (slow bull/structural bull). The core is the resonance of the five major logics of policy + liquidity + profit + capital + industry. It has shifted from "valuation repair" to "profit-driven" and has a more solid foundation.
1. Policy aspect: strong support and stable expectations
– The first year of the 15th Five-Year Plan: Strategies such as new productivity, AI, high-end manufacturing, and low-altitude economy are intensively implemented, and fiscal and monetary easing are implemented.
– Active capital market: reducing fees, stabilizing funds, guiding long-term money into the market, supporting base + boosting confidence.
– Debt elimination + anti-involution: local debt replacement, industry supply optimization, and leading profit restoration.
– External easing: The Federal Reserve will enter an interest rate cutting cycle in 2026, causing global liquidity to overflow.
2. Liquidity: Internal and external resonance, sufficient living water
– Domestic long-term money is accelerating its entry into the market: insurance funds, pension funds, and social security continue to allocate more A-shares; the scale of public offerings has reached a new high.
– Residential asset reallocation: deposit interest rates are falling, the property market is sluggish, and there is a clear trend of saving and moving.
– Return of foreign capital: appreciation of the RMB, easing of Sino-US relations, depressed A-share valuations, and continued inflows of northbound funds.
– The continuation of easy money: RRR and interest rate cuts are expected, and the social financing and credit environment are friendly.
3. Profitability: From “telling stories” to “making real money” (core engine)
– All-A profits are on the rise: Institutions unanimously expect profit growth in 2026 to be 8%-14%, and non-financial profits to be 12%-15%, significantly better than 2025.
– AI commercialization realization: AI applications (computing power, applications, robots) enter the profit release period from the investment period.
– PPI turns positive + inventory replenishment cycle: PPI bottoms out in Q1 of 2026, companies take the initiative to replenish inventory, and cyclical products have high profit elasticity.
– Going overseas + anti-involution: The proportion of overseas revenue has increased, the industry structure has been optimized, and leading profit margins have increased.
4. Capital: Supply and demand pattern continues to improve
– Optimization of the supply side: The pace of IPOs is controllable, buybacks and holdings increase, and delisting becomes normalized.
– The demand side explodes: residents + institutions + foreign capital resonate, and the scale of incremental funds is large.
– Valuations are still reasonable: Core index valuations are at mid-to-low historical levels and there is room for repair.
5. Industrial aspect: new engine + old cycle two-wheel drive
– The main line of new productivity: AI, semiconductors, computing power, data elements, commercial aerospace, and low-altitude economy.
– Procyclical recovery: Nonferrous metals, chemicals, coal, machinery, and building materials benefit from PPI and replenishment.
– Consumption + medicine: Domestic demand bottoms out and rebounds, valuations and profits are both restored.
6. Key conclusions (2026 bull market characteristics)
– Not a mad bull, but a slow bull/structural bull: the index fluctuates upward, the sector rotates, and the profit driver is more stable.
– From "Buffalo" to "Performance Bull": Rely on valuation in 2025, rely on profitability in 2026, and the market will be more durable.
– Risks are controllable: policy support, long-term money entering the market, weak economic recovery, and low probability of a sharp decline.
7. Important reminder (view rationally)
– There is no unilateral rise: shocks, corrections, and differentiation are the norm, and it is more important to grasp the main line.
– Profit verification is key: performance that falls short of expectations will lead to a sector correction.
– External risks remain: fluctuations in the Fed's pace, geography, and exchange rates may cause disturbances.
