---
title: "Chen Guo: The A-share bull market continues, but as it rises, we must remain rational! The market's mid-term main lines are three directions, and short-term operations need to be rebalanced"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/265751295.md"
description: "Chen Guo, deputy director of the research institute at EASTMONEY Securities, stated in the program that the A-share bull market will continue, but it is necessary to view the market rise rationally. U.S. tech stocks face significant valuation pressure, while other sectors in the A-shares still have room for growth, apart from the tech sector. The market trend is oscillating upward, and attention should be paid to policy changes and economic trends. In the short term, it is recommended to focus on sectors such as new energy, non-ferrous metals, and chemicals, while the AI and biotechnology sectors need consolidation. The main line in the medium to long term is ABC, and the market needs to rebalance"
datetime: "2025-11-13T14:26:06.000Z"
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  - [en](https://longbridge.com/en/news/265751295.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/265751295.md)
---

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# Chen Guo: The A-share bull market continues, but as it rises, we must remain rational! The market's mid-term main lines are three directions, and short-term operations need to be rebalanced

Recently, Chen Guo, Deputy Director and Chief Strategist of Dongfang Caifu Securities Research Institute, appeared on The Paper's "Chief Connection" program to share his judgment on the future of the A-share market.

The investment homework representative has summarized the key points as follows:

1.  The valuation pressure on U.S. tech stocks is significant. If some companies' Q3 reports do not meet expectations, stock price fluctuations will be very severe. It cannot yet be determined whether a bubble has emerged in the U.S. market or if the trend is about to reverse;
    
2.  Apart from the technology sector, many sectors in the A-share market have not fully performed in the past period. If domestic demand improves marginally and prices rise overall in the future, these sectors still have room for growth.
    
3.  The market is not overly excited about this round of bull market. The funding structure is also differentiated: funds from insurance channels are slowly flowing in and increasing allocation to equity assets, while public funds have not yet shown significant inflows, and the profit-making effect still needs time to accumulate.
    
4.  The market trend remains upward with fluctuations. The 4000-point level serves as a psychological integer barrier, which may experience some fluctuations and consolidation, but the subsequent trend is upward. Favorable factors will gradually manifest.
    

Structurally, the market will rebalance. This year, both the Chinese and U.S. markets have focused on AI and technology themes, but the prosperity in non-tech sectors is not yet evident. In the future, policies from China and the U.S. may be intensified, enhancing the upward trend of the economy.

1.  After the Q3 reports, the correlation between A-share performance or structure and short-term fundamentals may weaken.

The market may shift towards mid-term investment themes or layouts for next year's fundamental improvement. The strong performance of industries in the early part of the year has been fully reflected by the market, while Q4 performance will need to wait until March-April next year for verification.

During this period, themes may arise from policy planning (such as the "14th Five-Year Plan" guidance), global industrial changes, or overseas reflections, as well as deductions based on industrial logic...

These themes may not necessarily form a single main line but rather multiple main lines rotating and testing, aligning with the characteristics of a bull market with high-risk preferences and fluctuating layouts.

1.  The A-share bull market will continue, but increasing attention must be paid to potential risk factors. The mindset needs to be more balanced; the higher the rise, the more rational one should be.
    
2.  The mid-to-long-term main lines can be summarized as ABC...
    

In the short term, it is recommended to rebalance and focus on new energy, non-ferrous metals, chemicals, and engineering machinery. Some directions in AI have seen significant increases and need consolidation; the biotechnology sector also requires fluctuation and consolidation after previous gains, but the industrial trend remains positive.

Chen Guo believes that looking ahead, the A-share market may experience upward fluctuations, and attention should be paid to the progress of AI applications and changes in market risk preferences. In terms of investment strategy, it is advised to maintain rationality, balance mindset, set reasonable expected returns, and take profits at market peaks in a timely manner. AI is seen as a core opportunity for future investment, while biotechnology and commodities are also considered mid-term areas worth attention.

The following is the essence compiled by the investment homework representative (WeChat ID: touzizuoyeben) to share with everyone:

## **If Q3 reports fall short of expectations, U.S. tech stocks will experience more severe fluctuations**

Host: As Chen mentioned, the adjustment of technology stocks is particularly prominent amid market fluctuations, especially with the high intensity of discussions about the tech bubble in the U.S. stock market. How do you view the discussions surrounding the tech bubble? What is the current valuation level of technology stocks?

Chen Guo: From the perspective of the U.S. stock market, technology stock valuations are at a historically high level, which is a market consensus.

For example, the stock Pltr, which Michael Burry is shorting, has very high PE and PS valuations globally.

NVIDIA's PE is relatively acceptable, but overall, the valuations of the S&P 500 and NASDAQ are at historical highs, second only to the first half of 1999 to 2000.

The situation in China is slightly better. The Hang Seng Tech Index is at a historical median position, and representative internet or tech leading companies generally have PE valuations around 20 times.

The A-share market shows more obvious differentiation, with the ChiNext Index's valuation below the historical average, while the Sci-Tech Innovation Board Index's valuation is at a historically high level due to significant increases in the past two quarters and differences in industrial structure.

Overall, U.S. tech stocks face significant valuation pressure, and if some companies' Q3 reports fall short of expectations, stock price fluctuations will be very severe.

For example, Meta's earnings, excluding one-time tax impacts, did not fall below expectations, but concerns about return rates due to capital expenditure plans led to significant stock price fluctuations. This indicates that the market's sensitivity to performance has increased, and the implied expectations for valuations are high.

Even so, it can currently only be said that the divergence between bulls and bears has intensified, and short positions are beginning to build. The core issue remains the development of the AI industry itself, such as whether companies like OpenAI can achieve rapid revenue growth and profitability.

The future progress of AI applications will determine the outcome of the bull-bear game. If progress is smooth and profits can be realized, it will support AI computing power and capital expenditure investments.

## **There are still many sectors in A-shares that have not fully played out**

Host: After discussing the overseas market, let's focus more on A-shares. During this round of fluctuations in the overseas market, A-shares have shown a relatively independent and stable trend. What market signals do you think this has released?

Chen Guo: First of all, there are differences between A-shares and U.S. stocks in terms of market cycles and valuation positions.

The U.S. stock market has accumulated a large amount of profit, and valuations are at historical highs; while in A-shares, except for the Sci-Tech Innovation Board, the vast majority of indices such as ChiNext, Shanghai Composite, and CSI 300 are not at historical highs.

Considering the risk-free interest rate, the equity risk premium in A-shares is at an average level, indicating that the valuation cost-effectiveness of stocks relative to bonds is reasonable.

Secondly, the industrial situations in China and the U.S. are different. The U.S. is beginning to worry about excessive AI capital expenditure, while China has just started this year, with tech giants beginning to increase capital expenditure, far from reaching an excessive stage. Therefore, A-shares are more stable in the AI technology sector.

In addition, apart from the technology sector, there are many sectors in A-shares that have not fully played out in the past period. If domestic demand improves marginally and prices rise overall in the future, these sectors still have room for growth.

Therefore, I believe that it cannot yet be concluded that the U.S. market has entered a bubble or that a trend reversal is imminent; secondly, the A-share market itself is more stable, and many internal structures contain a lot of potential for development

## **The market is in a fluctuating slow bull pattern, not a continuous acceleration**

Host: Next, let's focus on the capital side with Mr. Chen. Since August, the A-share market has seen a trading volume exceeding 2 trillion yuan for 40 consecutive trading days, with several trading days exceeding 3 trillion yuan. However, recently around November, the A-share market has shown a decrease in volume, hovering below 2 trillion yuan for nearly a dozen trading days. What are your thoughts on this?

Chen Guo: This reflects that the market is in a fluctuating slow bull pattern, rather than a continuous acceleration.

Investors who have experienced the 2014-2015 market rally are more cautious after the index reaches a certain level. The previous round saw 4000 points as a signal for acceleration, attracting a rush of funds; whereas this time, everyone is more prudent, which helps the market to stabilize and progress steadily.

In terms of capital inflow, the overall situation is relatively mild, and there has not been a large-scale migration of household deposits.

High-frequency data from September and October shows that the market is not overly excited about this round of bull market. The capital structure is also differentiated: funds from insurance channels are slowly flowing in and increasing allocations to equity assets, while public funds have not yet seen significant inflows, and the profit-making effect still needs time to accumulate.

The margin balance has slowly risen over the past few months, indicating that high-risk preference investors remain optimistic. There are also signs of slow increases in foreign capital, but they are not yet significant. Typically, foreign capital tends to increase systematically at the end of the year, so we still need to wait.

In the short term, the market may not be in a state of rapid inflow of new capital, but in the medium term, capital is likely to continue flowing in.

By the end of the year, foreign capital inflow may become more apparent, and at the beginning of next year, household funds entering the market will also increase.

The first quarter is a period of good liquidity in the financial market. After a large number of fixed-term deposits mature, due to a significant decline in interest rates, some funds may flow into the market through wealth management, fixed income + insurance or funds, and stocks.

## **The market may shift to medium-term investment themes or layout directions for next year's fundamental improvement**

Host: In October, the disclosure of the third-quarter reports of listed companies has concluded, and the performance has been verified. As we enter November or before the end of the year, the market seems to be in a phase of temporary vacuum, lacking clear observation anchors. What new catalysts and variables do you think the A-share market mainly faces? What market indicators should investors focus on?

Chen Guo: After the third-quarter reports, the correlation between the A-share market's performance or structure and short-term fundamentals may weaken.

The market may shift to medium-term investment themes or layout directions for next year's fundamental improvement. The strong performance of industries earlier this year has been fully reflected in the market, while the fourth-quarter performance will not be verified until March-April next year.

During this period, themes may arise from policy planning (such as the "14th Five-Year Plan" guidelines), global industrial changes or overseas reflections, as well as deductions based on industrial logic. For example:

The AI market is spreading from hardware to software applications; global computing power demand is extending to electricity, infrastructure, and other directions; AI application fields such as intelligent driving and robotics; directions in the "14th Five-Year Plan" such as artificial intelligence, quantum, hydrogen energy, nuclear energy, and biotechnology; cyclical stocks in industries expected to prosper next year, such as industrial metals and chemicals.

These themes may not necessarily form a single main line but rather rotate through multiple main lines, in line with the characteristics of a bull market with high-risk preferences and fluctuating layouts

## **The External Environment in the Next Phase Will Be Better Than the Past**

Host: After discussing the domestic situation, let's focus on the overseas macro environment. What do you think about the external environment facing A-shares in the future? What positive factors are worth noting?

Chen Guo: The external environment in the next phase will be better than the past. When we proposed the "Confidence Reassessment Bull Market" last year, the market was at a low point of confidence, with concerns about the domestic economy, geopolitical environment, exports, and more.

Confidence reassessment includes two aspects: first, confidence in industrial upgrading, with technological breakthroughs driving the emergence of high ROE industries; second, the deepening of corporate internationalization, where the market was previously overly pessimistic.

In the current environment, the Sino-U.S. trade negotiations bring stable expectations, and the likelihood of the U.S. raising tariffs on China is low, and they may even decrease. There may not be significant tariff threats in the coming year, which is very beneficial for export enterprises to the U.S.

The U.S. is in a rate-cutting cycle, and Trump's policies and fiscal stimulus (such as the American Rescue Plan) have positive effects on the economy.

At the same time, the marginal decrease in U.S. tariffs on China, while traditional ally countries like the EU and Japan have higher tariffs, enhances China's relative competitiveness against the U.S.

Additionally, meetings such as APEC and Sino-U.S. leader summits are expected to release more cooperation signals, which is conducive to the revaluation of Chinese assets. Coupled with the Federal Reserve's rate cuts and improved dollar liquidity, foreign capital is expected to flow in significantly.

## **The Trend of A-shares Remains Upward with Fluctuations**

Host: Next, let's enter the configuration segment that investors are looking forward to. What is your judgment on the A-share market for the remaining two months of this year? How will A-shares around the 4000-point line move next?

Chen Guo: The market trend remains upward with fluctuations. The 4000-point mark, as a psychological round number, may experience some fluctuations and consolidation, but the subsequent trend will be upward. Favorable factors will gradually manifest.

Structurally, the market will rebalance. This year, both the Chinese and U.S. markets have focused on AI and technology themes, but the prosperity in non-tech sectors is not yet evident. In the future, Sino-U.S. policies may intensify, enhancing the upward trend of the economy.

Next year marks the beginning of the "14th Five-Year Plan" for China, and this year's economic goals can be successfully completed, but the GDP growth rate in the fourth quarter may be below 5%. To ensure a good start next year, policy layouts at the end of the year may be intensified, related to traditional economic sectors.

The U.S. rate cuts and the implementation of the American Rescue Plan will also benefit sectors related to the overseas economy. On one hand, the market is beginning to position for next year's thematic growth; on the other hand, the joint efforts of Sino-U.S. policies to promote economic growth will lead to performance in economically related sectors.

Cyclical stocks are more sensitive to marginal changes in policies or the economy, while consumer stocks are more late-cycle. It is recommended to pay attention to cyclical sectors such as non-ferrous metals, chemicals, and construction machinery.

## **Market Style Has Not Fully Switched, But Will Rebalance**

Host: In this round of market, the characteristics of sector rotation are prominent, especially with the recent return of "Old Deng stocks" to the spotlight. The end of the year and the beginning of the year is a key window for style switching. Do you think the current market style has switched? What indicators should we pay attention to when observing style switching?

Chen Guo: Currently, the market style has not fully switched. Style switching requires non-linear changes in profitability, liquidity, and risk appetite. If overall demand becomes evident, opportunities will increase, and extreme styles will change Current conditions do not yet show a clear style shift, but there will be rebalancing. The market is overly avoiding economically related sectors, while popular sectors have already reflected expectations. It is not advisable to simply switch between high and low; instead, a comprehensive allocation should be made based on gains, valuations, and changes in prosperity.

"Xiao Deng" assets may also switch internally, such as shifting from overseas AI chains to domestic ones, or from AI to Zhongdeng assets (like new energy). New energy has experienced a bear market adjustment, with valuations at low levels, showing signs of recovery, and is related to the energy and power demand of AI.

"Old Deng" assets, such as real estate, will ultimately benefit from economic transmission, but may lag relatively. It is not advisable to simply chase gains or cut losses; instead, a dynamic balance allocation should be maintained.

## **The Mid-to-Long-Term Investment Main Line is Summarized as ABC**

Host: Finally, regarding allocation, could you briefly outline the short-term and mid-to-long-term investment main lines you are optimistic about, and integrate the analysis for the audience by priority?

Chen Guo: The mid-term main line can be summarized as ABC:

-   A (AI): This is the biggest investment opportunity in this round of market, and we need to continuously seek new opportunities in the industrial chain and validate them. The AI revolution is a great change that should not be missed.
    
-   B (Biotech): Biotechnology aims to improve the quality and length of life, which is a long-term necessity. China is making rapid progress in this field, with emphasis in the "14th Five-Year Plan," and major global clusters are in China and the U.S.
    
-   C (Commodity): The global trend is towards easing, with the market expanding from gold and silver to small metals, industrial metals, chemicals, etc. Commodities and related stocks were previously underpriced, presenting mid-term opportunities.
    

In the short term, it is advisable to rebalance and focus on new energy, non-ferrous metals, chemicals, and engineering machinery. Some directions in AI have seen significant gains and need consolidation; the biotech sector also requires oscillation and consolidation after previous gains, but the industrial trend remains positive.

## **The Bull Market Will Continue, But Rationality Is Needed as It Rises**

Host: Overall, there are still many investment opportunities in the A-shares around the 4000-point mark, and investors can focus on the ABC main line. Finally, at this current point, what do you most want to remind investors to pay attention to?

Chen Guo: Since September last year, we have repeatedly connected at key points, always communicating with an optimistic perspective, which has been validated by the market. However, standing at 4000 points, the mindset needs to be more balanced; the higher it rises, the more rational one must be.

It is advisable to set reasonable profit targets, consider profit-taking operations, and strictly implement stop-loss rules. Dynamically monitor various changes, especially whether AI applications can achieve more commercialization breakthroughs next year, as well as the performance of the U.S. stock market. If the market begins to turn, it needs to be taken seriously.

We still believe the bull market will continue, but in the future, more attention must be paid to potential risk factors.

Source: Investment Workbook Pro Author: Class Representative

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Risk Warning and Disclaimer

The market carries risks, and investment should be approached with caution. This article does not constitute personal investment advice and does not take into account the specific investment goals, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. Investment based on this is at one's own risk

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