CITIC Securities' Qiu Xiang: Stabilizing and rebounding profit margins are essential prerequisites for continuing the bull market; focus shifts from valuation to profit margins.

CITIC Securities’ Chief A-Share Strategist, Qiu Xiang, said in his speech at CITIC Securities’ 2026 Spring Capital Markets Forum that geopolitical turmoil coincides with the index reaching a critical bottleneck, and spring is a period for rebuilding confidence and for making decisive index moves.

Spring A-shares are at a key juncture: the long-term stabilization and rebound in corporate profit margins are the necessary prerequisites for A-shares to sustain their bull market. In the next stage, the focus should shift from valuation to profit margins. Two of the most important factors are undervaluation and pricing power. Undervaluation is the strongest shield—undervaluation is better than overvaluation, value is better than growth, and large caps are better than small caps. These are the core strategy principles for responding to rising global energy and chemical costs and weakening financial conditions.

In terms of allocation, firmly build the positioning by leveraging China’s manufacturing advantages and pricing power weight allocation. (Caixin)