2025 A-share Bull Market Phased Assessment: Strategy Adjustment from Valuation Repair to Earnings Verification

• The A-share market entered a bull market after the policy combination in September 2024, with the Shanghai Composite Index hitting a 10-year high in 2025. It is currently shifting from a valuation repair phase to an earnings-driven performance verification phase (the 2026 full A-share non-financial non-resource net profit growth rate is expected to be 14%).
• Significant structural differentiation in the market: Tech growth (AI, new energy, military industry) leads gains, while traditional sectors are flat; the migration of household asset allocation to equities is still in its infancy, with large room for increased allocation.
• Tech sector risks: Trading crowding (Nasdaq PE 30x), risk of downward revision to AI earnings growth expectations (23.5% in 2025), macro demand weakness and Fed policy uncertainty are key challenges; concentration risk of US stocks’ “Big 7” is intensifying, and Hong Kong stock tech index has low valuation (21.5x).

The current market consensus is transitioning to the performance verification phase, requiring a shift from a “offense-only without defense” strategy to a “balanced offense-defense” strategy. Although there are opportunities in the tech growth sector, we need to be vigilant about crowding and valuation bubbles; Hong Kong stock tech may have valuation repair potential.

• Risks
  : Tech sector crowding, AI earnings downgrade risk, macro demand weakness, Fed policy uncertainty, US “Big 7” concentration.
• Opportunities
  : New productivity sectors (AI infrastructure, military trade, new energy), undervalued HK tech stocks.