Huayuan Securities assistant director of research and chief fixed-income and
banking analyst Liao Zhiming said China’s A-share market may have entered a new
allocation window after sustained pullbacks. He cites simultaneous improvement
in four conditions: valuations, corporate earnings, capital structure and
cross-asset valuation. CSI300 trades at 12.8x PE, near the 0.7th percentile over
the past year and the 50th percentile over the past decade; the ChiNext
composite PE has fallen to the 10th percentile over five years. All-A parent-net
profit rose about 16% in 1H and Liao expects high profit growth to persist into
Q3. With deposit rates and bond yields at historic lows and household deposits
topping 170 trillion yuan, equity investment looks more attractive; monetary
policy remains moderately loose with the possibility of future RRR and rate cuts
and fiscal spending likely to accelerate. He recommends steady, phased
positioning for medium-to-long-term opportunities amid rising market divergence.