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recently, press conferences of the state council information office and meetings of the political bureau of the central committee were held one after another, and a package of favorable policies was introduced. while prompting investors to regain confidence in a-shares, it also re-emphasized improving the quality of listed companies, supporting the entry of long-term funds into the market, and establishing key goals include long-term mechanisms for market inherent stability.

to this end, brokerage china reporters conducted an exclusive interview with yang changcheng, a member of the national committee of the chinese people's political consultative conference and chief economist of shenwan hongyuan securities research institute, to deeply interpret the causes and consequences of this round of a-share market, and analyze how investors can share the results of high-quality development with listed companies.

the rebound in cyclical factors coupled with favorable policies

brokerage china reporter: what do you think of the previous round of in-depth adjustments in the a-share market?

yang chengcheng:cyclical fluctuations are a basic feature of the global capital market. a-shares have experienced multiple rounds of fluctuations since 2000. compared with the past, this round of a-share adjustment has been close to three years, and the adjustment range is also larger, and it is somewhat different from the trends of major overseas stock markets. behind this are the structural reasons for a-shares themselves, but they are more affected by cyclical factors, among which the real estate cycle, currency interest rate cycle, technology industry cycle and institutional factors are particularly significant.

first, china's real estate market is undergoing the largest adjustment cycle since reform and opening up, which will inevitably have an impact on the capital market. of course, our capital market is generally relatively healthy, and the financial market has not collapsed due to real estate adjustments like japan did in the past.

the second is that in recent years, china and developed economies in europe and the united states have shown a clear misalignment of interest rates, prices and growth cycles. european and american countries have experienced severe inflation and have risen sharply, while our prices have been relatively sluggish and interest rates have fallen, forming a huge interest rate differential and leading to a large amount of capital outflows. this is also a problem faced by many emerging countries.

the third is that technology investment is cyclical, and there will inevitably be periodic corrections and differentiation during the development process. at present, the judgment and valuation of "hard technology" in my country's capital market are still in their infancy. there are difficulties such as lack of standards and difficulty in obtaining and understanding key information. therefore, it is more likely to cause problems such as label-based investment and excessive pursuit of hot spots, which will aggravate the market. fluctuation.

brokerage china reporter: the market now generally believes that the recent series of macro policies are the trigger for the short-term a-share market outbreak. do you agree with this statement?

yang chenglong:the market situation has suddenly improved recently. i think it is largely due to the obvious improvement in the above three major cyclical factors.

among them, after three years of in-depth adjustment, the real estate industry will enter a period of stable adjustment with the support of a new round of real estate financial policies. it is expected that further large-scale deterioration is unlikely. the united states has entered an interest rate cut cycle, which means that the interest rate gap between china and the united states has begun to narrow, the pressure on capital outflows has decreased, and the rmb exchange rate has rebounded, which may drive foreign investment back to emerging markets.

at the same time, investment in the technology industry has gradually entered a mature stage after experiencing the adjustment of "swarm" high valuations and the bursting of valuation bubbles in the early stage. the market's understanding of technology investment is gradually returning to rationality, and investment confidence in technology assets is being reshaped at an accelerated pace. from the perspective of industrial development, in recent years, my country has shown a significant improvement trend from the industrialization of scientific and technological research and development to the scale of scientific and technological products to the international competitiveness of the industry.

of course, policy factors also played an important role in this round of a-share market. however, it should be noted that the introduction of macroeconomic policies by the state cannot simply be understood as the need to boost the stock market. its main purpose is still to carry out macro-control in response to the current economic situation, but it resonates with the bottoming out of the three major cyclical factors and plays a positive role in promoting and promoting the stock market.

the value of long-term asset allocation in china is highlighted

brokerage china reporter: with the recent heating up of a-share transactions, many overseas investors have also shown great interest in chinese assets. what do you think of this?

yang chengcheng:i think the reason why funds from all walks of life are paying close attention to china's equity market is because of the following reasons.

first of all, whether compared with historical data or compared with the united states, japan or even india, the valuation advantage of chinese assets is relatively prominent. in mid-september, the overall pe of a-shares was only 14.9 times, and the pe of the shanghai composite index was only 12.2 times, both of which were around the 20% historical quantile since 2005; the pe of the csi 300 index (10.9 times) was far lower than that of the s&p 500 index (28 times), gem index pe (23.6 times) are also much lower than the nasdaq index (43.6 times).

with the advancement of industrial mergers, acquisitions, restructuring and production capacity clearance, the profitability and market competitiveness of high-quality leading a-share companies will further increase. in recent years, a-share listed companies have paid more and more attention to investor returns, and dividend activities have increased significantly. as the market environment improves, the allocation value of high-quality leading a-share listed companies will be further highlighted.

secondly, although some domestic macroeconomic indicators have been weak in recent years, china's major breakthroughs in high-tech technology, development of science and technology industries, and global competitiveness have all achieved rapid improvement. in terms of technological innovation, technology industry, technology competition, export competition, etc. the achievements in all aspects are obvious to all. the whole world also recognizes that china is the largest and most potential market in the world.

another very important indicator is the sharp rebound in the rmb exchange rate. in the past period of time, inflation has heated up the european and american markets to a large extent because of the nominal added value of inflation. now, as interest rates fall and prices fall, the related negative impacts are beginning to appear, and people's cost of living has increased significantly.

in general, cyclical factors have bottomed out, favorable policies have been released one after another, the institutional foundation for high-quality development of the domestic capital market is constantly improving, and a benign market ecology of long-term money and long-term investment is gradually taking shape. with the accumulation of a series of positive factors, the long-term allocation value of a-share high-quality assets is becoming increasingly prominent.

diverse entities share high-quality development results

brokerage china reporter: in your opinion, what stage of development is china’s economy currently at?

yang chengcheng:from 2002 to 2023, my country is in a period of economic growth shifting and structural adjustment. the economic growth has shifted from a high-speed growth platform of about 10% to a medium-high-speed growth platform of 7%-8%, and then to a growth rate of about 5%. the stable growth platform has basically completed the shift in growth rate.

at present, my country's economic demand-side structural adjustment is basically in place, and the financial market environment has improved marginally. the real estate transformation still requires patience, but it is not appropriate to be overly pessimistic. making local government's implicit debt explicit will help alleviate debt risks. sino-us relations are in the easing stage, and china's economy is expected to achieve steady growth at a growth center of around 5%.

brokerage china reporter: at this point in time, how do you think securities companies can help listed companies improve their quality and share the results of high-quality development?

yang chengcheng:to talk about this topic, we must first solve a question - what is a high-quality listed company? is it because the financial indicators are good, performance remains unchanged, or is the return on investment high?

the so-called listed company is an organization formed by the joint investment and cooperation of various investment entities. each investment entity has a different identity and has different requirements: bank loans focus most on whether cash flow can guarantee debt repayment, while equity investors pay more attention to investment return, major shareholders focus on corporate profits and dividends...

based on the above discussion, i think we first need to help listed companies improve their operation and management levels, improve their operating efficiency, and achieve good financial indicators. at a higher level, it is necessary to clarify the investment logic held by different investment entities and strengthen value integration under multiple investment entities.

at the third level, in addition to major shareholders, the final value of all types of investors must be realized through exit. this faces the problems of how to solve valuation pricing, liquidity support and exit channels. therefore, we must start from in the market system, the entry and exit channels for different investment entities should be improved.

specifically, different investment entities often only think from their own perspectives, leading to prominent conflicts. this requires us financial practitioners to first learn to look at problems from an entity perspective and not be limited to finance and financial models. at the same time, entrepreneurs must also be aware of the different investment requirements of different types of financial investors.

at the same time, with market progress and industrial development, the technological paths and digital models of enterprises are gradually placing higher demands on financial practitioners, which requires financial institutions to continuously optimize their talent structure and continue to learn so as not to fall behind. in this process, financial institutions should also explore how to price and evaluate modern production factors such as patents, technologies, numbers, and models, and establish methods to financialize, monetize, and capitalize intangible assets. to this end, securities companies still need to do a lot of work in investment research, improve and optimize the value standard measurement system, and promote corporate value discovery.

editor: lin gen

proofreader: yao yuan