Li Qiusuo, chief domestic strategist at China International Capital Co, said
external disturbances have shown signs of abating and corporate earnings remain
resilient; if external shocks marginally ease, the market could see early
valuation repair. Through Q3, A-share revenue and earnings growth outpaced
nominal GDP and non-financial corporate profits remain stable, with AI and
energy sectors providing meaningful support. Broad-index valuations have fallen
materially: the CSI300 forward P/E is near its 10-year average while the ChiNext
forward P/E sits at historical extremes, leaving overall market valuation
attractive and vulnerable to recovery if risks subside. He recommends a
tech-plus-dividend barbell allocation, expects the next phase to be structurally
driven, and flags sustained AI momentum and higher conviction in tech hardware
(optical communications, semiconductor equipment, and sectors tied to upstream
power bottlenecks); among cyclicals he highlights chemicals, petrochemicals and
construction machinery as showing improving supply-demand and potential
earnings-recovery upside.
