---
title: "Cathay Securities & Haitong Securities · Strategic Outlook | The Chinese stock market is expected to see an important bottom and hitting point"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/280059567.md"
description: "Guotai Junan Securities Research points out that the Chinese stock market is expected to see an important bottom and turning point, and it is not advisable to blindly sell off at this time. The market adjustment is mainly influenced by inflation risks and expectations of financial tightening. Although external conflicts have limited impact on China, the market's willingness to take risks has decreased. It is expected that the impact of micro trading shocks will not last long, and Chinese assets possess enhanced technological productivity and a relatively stable security situation. Investors need to pay attention to the pricing process of energy shocks and expectations of financial tightening"
datetime: "2026-03-22T15:42:37.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/280059567.md)
  - [en](https://longbridge.com/en/news/280059567.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/280059567.md)
---

# Cathay Securities & Haitong Securities · Strategic Outlook | The Chinese stock market is expected to see an important bottom and hitting point

Core Viewpoint: The micro trading impact will not last long, and it is not advisable to blindly sell off at the current position. The Chinese stock market is expected to see an important bottom and hitting zone. China's supportive easing stance and diversified reserves/diversified growth will help break the risk narrative more quickly.

Investment Points

▶ The Chinese stock market is expected to see an important bottom and hitting point, with stability as the base color and confidence as the key. The SSE Index has fallen below a critical point; although the CSI 300 and ChiNext Index have not adjusted much, there is actually significant divergence, with the average adjustment across the entire A-share market close to 9%, and the CSI 1000 down 10%. The recent market adjustment has two reasons: first, inflation risks and expectations of financial tightening. The unclear direction of the U.S.-Iran situation has caused a surge in energy inflation and derived concerns about financial tightening. Second, the micro trading structure of the stock market is loosening. Although external conflicts do not directly impact China logically, the unclear situation has reduced the market's willingness to take on risks. Recently, both stocks and bonds have adjusted simultaneously, and the floating profits of fixed income + type products have narrowed, while the increase in floating losses has created investment constraints for institutions with relatively rigid liabilities and high positions since the beginning of the year. We expect the impact of micro trading shocks will not last long, and it is not advisable to blindly sell off at the current position. The Chinese stock market is expected to see an important bottom and hitting zone. Although inflation risks still need to peak, it should be noted that Chinese assets have both improved technological productivity and a relatively stable security situation, economic society, and capital market. China's diversified energy reserves and diversified growth are also scarce from a global perspective.

▶ How will the risks of energy shocks and expectations of financial tightening be priced? The evolution of three stages: expected shock - real shock - return to growth logic. In our recent roadshow, some investors expressed deep concerns about the impact of energy price shocks and expectations of financial tightening. An important historical reference is that in 2022, the U.S. stock market experienced fluctuations due to the Russia-Ukraine conflict and several substantial interest rate hikes by the Federal Reserve, but it also showed strong resilience and rebound, not collapsing. Risk pricing is generally divided into three stages: the first stage, expected shock. From March to June 2022, the Russia-Ukraine conflict broke out, oil prices soared, and the Federal Reserve initiated substantial interest rate hikes in the same month, leading to a decline in the U.S. stock market; the second stage, real shock. After June 2022, although the Russia-Ukraine conflict continued, its intensity did not increase, and oil prices began to decline from high levels, effectively ending risk pricing. However, due to sticky inflation and the Federal Reserve's interest rate hikes, the U.S. stock market remained in a state of rebound and fluctuation. The third stage, return to growth logic. Starting in January 2023, the U.S. AI industry made significant progress, with capital expenditures and performance rising, driving the stock market higher. In this process, two insights about market pricing can be drawn: 1) Risk pricing does not require seeing the end of risks, but rather ends when the intensity no longer increases. 2) After risk pricing ends, the key is whether the market itself has the capacity for growth. Currently, the U.S. tolerance for inflation may be higher, and the People's Bank of China has also emphasized a supportive monetary stance. The stronger certainty of easing and China's increased investment in technology and stabilization of domestic demand will help break the risk narrative more quickly ▶ Industry Comparison: Finance and stability remain the top choices, while China's technology manufacturing and stable domestic demand are key to breaking the narrative of stagflation risk. 1) Finance and stability sector: An important stabilizer in the market, high dividend yields have allocation value, recommended: banks/power/highways/coal. 2) Technology manufacturing and energy transition: Companies in capital goods and equipment with global competitiveness and cost advantages in China benefit from energy shocks and transitions, recommended: power equipment/new energy vehicles/construction machinery. The AI space is vast, and with increased technology investment in China by 2026, it is expected to accelerate the growth of domestic lines. Recommended:

semiconductors

/communication equipment/machinery. 3) Domestic demand value: Policy deployment stabilizes investment, combined with rising inflation is expected to drive replenishment demand, recommended: building materials/construction/hotels/consumer goods.

▶ Theme Recommendations: 1. Energy Transition: Geopolitical conflicts disrupt key energy supplies, with policies focusing on the construction of a new energy system and future energy, optimistic about power grids/new energy storage/nuclear fusion energy. 2. Computing Power Synergy: Integrating computing power, electricity, and source network load storage pathways, optimistic about computing power facilities, grid digitization, and green electricity computing power operators. 3. Token Going Global: Domestic large models lead in global usage, optimistic about large models/AIDC/domestic computing power. 4. Commercial Aerospace: Building a new pillar industry in aerospace, optimistic about the medium and large rocket manufacturing and launch service industry chain.

▶ Risk Warning: Overseas economic recession exceeds expectations, global geopolitical uncertainties.

Directory

01

The Chinese stock market is expected to see an important bottom and hitting point, stability is the base color, and confidence is key.

 

The Chinese stock market is expected to see an important bottom and hitting point, with stability as the base color and confidence as the key. The SSE Index has fallen below a critical point; although the CSI 300 and ChiNext Index have not declined much, there is significant divergence, with the average adjustment across the entire A-share market approaching 9%, and the CSI 1000 down 10%. The recent market adjustment has two reasons: first, inflation risks and expectations of financial tightening. The unclear trajectory of the US-Iran situation has led to significant energy inflation and concerns about financial contraction. Second, the micro trading structure of the stock market is loosening. Although external conflicts do not directly impact China logically, the uncertain situation has reduced the market's willingness to take risks. Recently, both stocks and bonds have adjusted simultaneously, with the floating profits of fixed income + type products narrowing and the floating losses increasing, creating investment constraints for institutions with relatively rigid liabilities and high positions since the beginning of the year. We expect the impact of micro trading shocks will not last long; it is not advisable to blindly sell off at the current position. The Chinese stock market is likely to see an important bottom and hitting area. Although inflation risks still need to peak, it should be noted that Chinese assets have both improved technological productivity and a relatively stable security situation, economy, society, and capital market, which are scarce even from a global perspective. China's diversified energy reserves and varied growth. How will the risks of energy shocks and expectations of financial tightening be priced? The three-stage evolution of expected shock - reality shock - return to growth logic. In our recent roadshow, some investors expressed deep concerns about the impact of energy price shocks and expectations of financial tightening. An important historical reference is that in 2022, the US stock market experienced fluctuations due to the Russia-Ukraine conflict and several substantial interest rate hikes by the Federal Reserve, but it also showed strong resilience and rebound, not collapsing. The overall risk pricing can be divided into three stages: the first stage, expected shock. From March to June 2022, the Russia-Ukraine conflict broke out, oil prices soared, and the Federal Reserve initiated substantial interest rate hikes in the same month, leading to a decline in the US stock market; the second stage, reality shock. After June 2022, although the Russia-Ukraine conflict continued, its intensity did not increase, and oil prices began to decline from high levels, with risk pricing basically ending. However, due to sticky inflation and the Federal Reserve's interest rate hikes, the US stock market remained in a state of rebound and fluctuation Phase three, returning to growth logic. Since January 2023, the U.S. AI industry has made significant progress, with capital expenditures and performance rising, driving the stock market higher. In this process, two insights about market pricing can be drawn: 1) Risk pricing does not require the end of risk, but rather that when the intensity no longer rises, risk pricing ends. 2) After risk pricing ends, the key is whether the market itself has growth capability. Currently, the U.S. tolerance for inflation may be higher, and the People's Bank of China has also emphasized a supportive monetary stance. The stronger certainty of easing, along with China's increased investment in technology and stabilization of domestic demand, will help break the risk narrative more quickly.

03 Industry comparison: Finance and stability remain the top choices, while Chinese technology manufacturing and stable domestic demand are key industries to break the stagnation risk narrative. Comparison: Finance and stability remain the top choices, while Chinese technology manufacturing and stable domestic demand are key industries to break the stagnation risk narrative. 1) Finance and stability sectors: Important stabilizers in the market, high dividend yields have allocation value, recommended: banks/power/electricity/highways/coal. 2) Technology manufacturing and energy transition: Chinese capital goods and equipment companies with global competitiveness and cost advantages benefit from energy shocks and transitions, recommended: power equipment/new energy vehicles/construction machinery. The AI space is vast, and with increased technology investment in China by 2026, it is expected to drive accelerated growth of domestic lines. Recommended: semiconductors/communication equipment/machinery. 3) Domestic demand value: Policy deployment stabilizes investment, coupled with the rebound in inflation, is expected to drive replenishment demand, recommended: building materials/construction/hotels/consumer goods.

04 Theme recommendations: Energy transition/smart electricity synergy/Token going overseas/commercial aerospace

1.  Energy Transition: Safety as the foundation, transformation as the trend, optimistic about benefiting from the clean energy transition with new energy infrastructure, advanced energy equipment, and future energy.

Investment suggestion: The resonance of safety and transformation is expected to accelerate the construction of a new energy system. The 14th Five-Year Plan outlines the need to accelerate the establishment of a clean, low-carbon, safe, and efficient new energy system to build a strong energy nation. It implements a ten-year doubling action for non-fossil energy and emphasizes strengthening the security of energy resource supply in the chapter on ensuring national economic security. Geopolitical conflicts disturb the security of key energy supplies, and policies focus on building and cultivating the development of a new energy system for future energy. Seize investment opportunities in new energy infrastructure, energy equipment, and future energy.

Direction 1: Investment in energy infrastructure such as power grids/wind, solar, water, nuclear/new energy storage that benefit from increased investment in major energy projects;

Direction 2: Green hydrogen/nuclear fusion energy that benefits from breakthroughs in key technologies and scenarios.

1.  Computing and Electricity Synergy: Unblocking the integrated pathway of computing power, electricity, and source-network-load-storage, optimistic about computing power facilities, grid digitization, and green electricity computing operators.

Investment suggestion: The synergy of green electricity and computing power layout leads new infrastructure investment. The government work report of the National Two Sessions in 2026 proposed the implementation of ultra-large-scale intelligent computing clusters and computing-electricity synergy as new infrastructure projects. The 14th Five-Year Plan proposed accelerating the construction of national hub computing power facility clusters and promoting the synergy layout of green electricity and computing power. The increase in green electricity installations requires new scenarios for large-load consumption, while the expansion of computing power faces constraints of electricity costs and flexible supply. The synergy of computing and electricity unblocks the integrated pathway of computing power, electricity, and source-network-load-storage.

Direction 1: Benefiting from the construction of large-scale intelligent computing clusters, such as HVDC/liquid cooling/storage;

Direction 2: Benefiting from the digital transformation of the grid, such as smart grids/virtual power plants;

Direction 3: Green electricity and data center operators.

1.  Token Going Global: The global usage of domestic large models has increased significantly, and Chinese model resources are integrated with global AI demand, optimistic about leading model companies/AIDC power equipment/domestic computing power.

Investment suggestion: Chinese model resources integrated with global AI demand will gradually build a systematic advantage in the power-computing-model-application system in China's AI industry. The government work report in 2026 pointed out the need to create a new form of intelligent economy, deepen and expand "artificial intelligence +", and promote the commercialization and large-scale application of artificial intelligence in key industries. The 14th Five-Year Plan will strengthen the efficient supply of computing power algorithms and data, promote iterative innovation of model algorithms, and empower various industries comprehensively. Domestic large models have significant advantages in talent, electricity, etc., leading in model scoring, possessing strong competitive advantages in overseas markets, and globalization is also a strategic deployment for most leading model manufacturers. China's AI industry will gradually build a systematic advantage in the power-computing-model-application system.

Direction 1: Domestic large model companies with a global leading advantage and benefiting from the increase in Token usage;

Direction 2: AIDC power equipment/computing power leasing/domestic GPUs;

Direction 3: Internet platform companies with traffic entry advantages and user stickiness, continuously increasing capital expenditure and having high product maturity.

1.  Commercial Space: The low-orbit satellite internet networking is expected to accelerate, with new technological breakthroughs and the complementing of launch sites resonating, optimistic about aerospace new infrastructure/application new scenarios/frontier new technologies Investment Advice: The low-orbit satellite internet network is expected to accelerate, resonating with breakthroughs in new technologies and the construction of launch sites to address shortcomings. The "14th Five-Year Plan" outlines the acceleration of the development of strategic emerging industries such as aerospace and the rapid establishment of low-orbit satellite internet networks. By 2025, China is expected to complete 92 space launch missions, of which commercial space launches (including rideshare and payload) will account for 51, or 55.4%. It is anticipated that by 2030, China's annual satellite launch demand will grow more than tenfold compared to 2024, urgently needing to address capacity shortages and cost issues. Breakthroughs in reusable/large liquid rocket technologies, accelerated launch site construction, and the implementation of terminal application scenarios will jointly promote the scaled development of the commercial aerospace industry. The Zhuque-3 is scheduled to conduct recovery tests again in the second quarter of 2026 and aims to attempt its first recovery and reuse flight in the fourth quarter based on the results of the recovery tests. The financing and commercialization processes of private rocket manufacturing companies are accelerating.

Direction One: Benefiting from the acceleration of rocket launches and financing, medium and large reusable liquid rockets and low-orbit satellite manufacturing;

Direction Two: Benefiting from increased infrastructure construction, launch sites/special fuels and gases.

05

Risk Warning

Risk Warning: Overseas economic recession exceeds expectations, global geopolitical uncertainties.

Report Source

The above content is excerpted from the securities research report published by Guotai Junan Securities.

Report Title: The Chinese stock market is expected to see an important bottom and hitting point; Report Date: 2026.03.22 Report Authors:

Fang Yi (Analyst), Registration Number: S0880520120005

Guo Yinhang (Analyst), Registration Number: S0880524100001

Tian Kaixuan (Analyst), Registration Number: S0880524080006

Su Hui (Analyst), Registration Number: S0880516080006

Important Reminder

The content contained in this subscription account is intended only for clients who have signed up for Guotai Junan Securities research services. As access restrictions cannot be set for this material at this time, in accordance with the requirements of the "Securities and Futures Investor Suitability Management Measures," if you are not a signed client of Guotai Junan Securities research services, to ensure service quality and control investment risks, please unsubscribe and do not subscribe to, receive, or use any information in this subscription account. We sincerely apologize for any inconvenience this may cause you and greatly appreciate your understanding and cooperation! If you have any questions, please contact us using the contact information at the end of this document Legal Statement

This public subscription account (WeChat ID: GTHT RESEARCH) is the only official subscription account established and independently operated by the Research Institute of Guotai Junan Securities Co., Ltd. (hereinafter referred to as "Guotai Junan Securities"). Other institutions or individuals registered on the WeChat platform in the name of Guotai Junan Research Institute, or containing "Guotai Junan Research," or containing other subscription accounts related to the brand name of Guotai Junan Securities Research Institute are not official subscription accounts of Guotai Junan Securities Research Institute. This subscription account is not a platform for the release of research reports by Guotai Junan Securities. The content contained in this subscription account comes from research reports officially published by Guotai Junan Securities Research Institute. For detailed securities research information, please refer to the complete reports published by Guotai Junan Securities Research Institute. Under no circumstances does the content of this subscription account constitute investment advice to any person, and Guotai Junan Securities shall not be liable for any losses incurred by any person due to the use of any content contained in this subscription account. The copyright of the content contained in this subscription account belongs solely to Guotai Junan Securities, which reserves all legal rights to this subscription account. Subscribers who copy or reproduce any content published by this subscription account (including text, images, etc.) must indicate the source as "Guotai Junan Research" and may not quote, abridge, or modify the content of this subscription account in any way that contradicts its original meaning

### Related Stocks

- [000001.CN](https://longbridge.com/en/quote/000001.CN.md)
- [000300.CN](https://longbridge.com/en/quote/000300.CN.md)
- [399300.CN](https://longbridge.com/en/quote/399300.CN.md)
- [002800.CN](https://longbridge.com/en/quote/002800.CN.md)
- [510300.CN](https://longbridge.com/en/quote/510300.CN.md)
- [161720.CN](https://longbridge.com/en/quote/161720.CN.md)
- [161811.CN](https://longbridge.com/en/quote/161811.CN.md)
- [510310.CN](https://longbridge.com/en/quote/510310.CN.md)
- [501045.CN](https://longbridge.com/en/quote/501045.CN.md)
- [159919.CN](https://longbridge.com/en/quote/159919.CN.md)
- [02827.HK](https://longbridge.com/en/quote/02827.HK.md)
- [510210.CN](https://longbridge.com/en/quote/510210.CN.md)
- [166802.CN](https://longbridge.com/en/quote/166802.CN.md)
- [510980.CN](https://longbridge.com/en/quote/510980.CN.md)

## Related News & Research

- [New Home Prices Rise, Hold Steady in Five More Major Chinese Cities in April](https://longbridge.com/en/news/286849542.md)
- [China April Retail Sales +0.2% y/y (exp 2%) & Industrial Prduction +4.1% y/y (exp 5.9%)](https://longbridge.com/en/news/286699672.md)
- [China's property investment extends decline in January-April](https://longbridge.com/en/news/286699189.md)
- [China new home prices fall at slowest monthly pace in a year in April](https://longbridge.com/en/news/286697169.md)
- [China economy slows sharply as investment returns to contraction](https://longbridge.com/en/news/286707036.md)