After the recent sharp sell-off, multiple A-share indicators are near historical
troughs: volumes and turnover have collapsed to cycle lows, while ETF-led
medium-to-long-term inflows have accelerated and stabilization efforts have
intensified. Stabilization mechanisms are becoming more institutionalized,
reinforcing a policy floor. Market bottoms tend to lead fundamental bottoms;
corporate earnings and PPI remain on an improving trend, which is supportive for
A-shares. External risks are limited by marked deleveraging in Japan and Korea,
but US equity AI rerating appears shifting from investment expansion toward
capital-return validation; together with elevated US Treasury yields and rising
oil, this constrains easing and keeps higher rates a cap on valuations. Given
historical precedence that ETF-supported troughs often precede rebounds, expect
near-term range-bound bottoming with structural opportunities. Maintain balanced
allocations and monitor key catalysts over the next two weeks. For the next 3–6
months: in a high-rate environment prioritize companies with strong
earnings/cashflow (the 'numerator') and healthy shareholding/liquidity
structures; when rates roll over, broaden exposure to technology; await further
domestic policy follow-through to shift positioning toward domestic-demand
beneficiaries.
