One year ago on September 24, 2024, China's financial regulators unveiled a series of heavyweight policies aimed at revitalizing capital markets and boosting investor confidence, officially kicking off a new bull market for A-shares.
Over the past year, the A-share market has delivered stellar returns. Total market capitalization broke through the 100 trillion yuan mark, rising by more than 34.58 trillion yuan to 105.05 trillion yuan. Excluding new listings, the increase exceeded 33.04 trillion yuan, bringing the latest figure to 103.51 trillion yuan. More than 90% of stocks posted gains, with over 1,400 stocks doubling in price. The market's trajectory has exhibited classic "slow bull" characteristics—steady index gains with lower volatility than previous bull runs. This rally has not only lifted valuations but, more importantly, reshaped market structure and investment logic.
(Source: Cailianshe)
Over the past year, amid a rebound in investor sentiment and a doubling in trading activity, Chinese assets have led global equity markets. All major A-share indices posted substantial gains, with a clear tilt toward growth over value. The Beijing Stock Exchange 50 Index led all major indices with a 158.01% gain. Even traditional main board indices performed well: the Shanghai Composite rose 39.08%, the Shenzhen Component Index gained 62.31%, and the CSI 300 rose 40.73%.
The STAR 50 and ChiNext indices both doubled, rising approximately 118.85% and 106.07%, respectively.
Hong Kong markets also performed strongly, with the Hang Seng Tech Index and Hang Seng Index rising over 67% and 43%, respectively.
Structural Reshaping: Tech Takes the Lead, Value Plays Catch-Up
The core feature of this bull market is the reshaping of valuation systems and a shift in market leadership. Driven by policy tailwinds and industrial logic, the tech innovation sector has emerged as the biggest winner, leading the valuation recovery of leaders across various fields.
By sector, electronics, conglomerates, and media led the Shenwan primary industries with gains of 203.35%, 177.08%, and 129.05%, respectively. Tech growth sectors such as electronics, communications, computers, machinery, and electrical equipment all rose over 100%. Hard tech performed particularly well: semiconductors and hardware equipment together contributed 14 to 15 companies with market cap gains exceeding 100 billion yuan, acting as the "dual engines" of market cap growth. This fundamental shift in market structure is reflected in the reshuffling of market cap tiers: the number of A-share companies with a trillion-yuan market cap rose from 9 a year ago to 13 currently. New trillion-yuan giants include CATL, Foxconn Industrial Internet, China Merchants Bank, and SMIC. Among the top 50 companies by market cap, the number of tech firms has increased from 18 at the end of the 13th Five-Year Plan to 24 currently. The top 5 companies on the ChiNext board have also undergone a complete transformation, shifting from a previous focus on banks, non-bank finance, and oil/petrochemicals to new economy sectors such as electronics and biomedicine.
(Source: Cailianshe)
Among them, Foxconn Industrial Internet saw the largest market cap increase in A-shares over the past year, rising by over 1 trillion yuan (1.0356 trillion yuan), a gain of nearly 300%. Its success lies in seizing the historic opportunity of surging global AI computing demand, transforming its market positioning from a traditional consumer electronics "OEM" to a "global leader in AI servers." Additionally, high-growth stocks such as Shenzhen Success Electronics (up 1,061.66%) and Cambricon (up 535.14%) demonstrated the explosive power of high-prosperity sectors. These doubling stocks typically share characteristics: relatively small market cap, distinct themes (e.g., robotics, semiconductors, innovative drugs, solid-state batteries), and clear policy support.
While hard tech sectors surged, financials and traditional industry leaders also experienced value recovery in this rally. Low-valuation blue chips such as banks showed repair momentum—for example, Agricultural Bank of China and Industrial and Commercial Bank of China each saw market cap gains exceeding 200 billion yuan. Traditional industry leaders like Kweichow Moutai and Hengrui Medicine also achieved value growth, reflecting that main board companies are more driven by steady fundamental improvements and value reassessment.
Policy and Macroeconomic Shifts: Deep Changes and Structural Challenges
Since "924," the policy toolkit has centered on "stabilizing growth, stabilizing property, and stabilizing the stock market." But the design philosophy has undergone a profound shift, aiming to build a healthier, more sustainable capital market. Policies no longer favor broad-based easing ("flood irrigation") but instead use structural tools to precisely support tech and the real economy. Behind this shift is the national strategy to promote "new quality productive forces" as the core driver of economic transformation and growth. Policy dividends continue to be released—for example, the "1+6" reform optimized the STAR Market's tiered mechanism, and M&A activity has increased, aiming to provide more flexible financing environments and higher valuation premiums for tech and emerging sectors. At the same time, policies explicitly require guiding medium- to long-term funds into the market.
This policy orientation has fundamentally impacted the insurance industry, often called the "bull market engine." In the post-property era, insurers are undergoing a period of underlying asset replacement, with their asset allocation structure in a transitional adjustment. Although net investment yields remain under pressure due to accounting rule changes and falling risk-free rates, total investment yields have improved significantly, thanks largely to contributions from equity assets. In the first half of the year, all insurers that disclosed asset structures showed a clear increase in equity allocation—for example, Ping An Insurance sharply increased its equity holdings. This shift from property assets to equities not only repairs insurers' balance sheets but also provides critical medium- to long-term funding support for the A-share market's sustained upward trend.
However, structural contradictions and challenges remain at the macroeconomic level, which are core factors affecting the sustainability of the "slow bull." On one hand, the market's prosperity contrasts sharply with the sluggish revenue growth of all A-share non-financial companies. On the other hand, the market needs to resolve the structural contradiction of inefficient transmission of incremental funds. The property market adjustment and the "savings migration" of households are profoundly reshaping capital flow logic. Although overall market valuations (e.g., PE, PS) are far from bubble levels, this liquidity- and structurally-driven rally against a backdrop of macro growth pressure must find solid fundamental support to achieve sustainable development.
Looking Ahead: Transition to Earnings-Driven Phase and Inflection Point Expectations
The current "slow bull" tone for A-shares has not changed, but its sustainability hinges on a successful transition from policy- and liquidity-driven to earnings- and fundamental-driven.
The outlook is supported by a "triple logic": on the industry side, high-prosperity sectors (AI, advanced manufacturing) still have ample room, and the tech bull is expected to continue; on the funding side, Goldman Sachs predicts over 10 trillion yuan in potential funds will gradually enter the market, and institutional allocation to tech still has room to increase; on the policy side, the "new quality productive forces" strategy and reform dividends will continue to be released. These factors together ensure the stability of the "slow bull."
To achieve the transition to fundamentals-driven, the key lies in the repair of earnings fundamentals and the diffusion of structural prosperity. Currently, leaders in various sectors have completed their valuation recovery first. Future upward momentum needs to rely on sustained improvement in corporate earnings. In the short term, the market may be in a small-scale consolidation phase, with increased long-short battles and some rotation from high- to low-valuation sectors stalling, limiting the rally's elasticity. But over the medium to long term, the market outlook remains promising.
DBS Securities believes the current rally needs to broaden, but the "slow bull" tone remains unchanged. The market is expected to regain confidence and reach new heights after clarifying policy directions, especially in Q4 when next year's policy direction is determined. Guojin Securities goes further, suggesting that a bull market driven by a recovery in China's earnings fundamentals may be brewing. The inflection point for fundamentals-driven will manifest in two aspects: first, structural opportunities in tech growth (combining prosperity, technological progress, and policy support) are likely to continue; second, as earnings recover, sectors benefiting from improved operations due to domestic anti-involution, manufacturing activity recovery and investment acceleration after overseas rate cuts (e.g., upstream resources, capital goods), and domestic demand-related areas (e.g., food & beverage, tourism) will gradually present opportunities. Additionally, the insurance industry's long-term asset side will benefit from a bottoming and recovery in capital returns, and brokerages are also worth watching.
In summary, the market is currently in a critical transition period, with a "liquidity bull" catalyzed by policy awaiting a "fundamentals inflection point" confirmed by high-growth tech companies and traditional blue-chip repairs. Investors should maintain confidence and patience, focus on tech tracks with "earnings + expectations," and pay attention to policy signals in Q4 to seize structural opportunities as the rally broadens to more sectors.
Risk Warning: The views in this article are for reference only and do not represent any investment advice. The market carries risks; invest with caution.
