The founder of Sspai, Zhou Liang, has recently "spoken out": The goal of this bull market is a record high, and China's stock market now holds all five trump cards.
As a veteran active equity private fund in the industry, Minority Capital has maintained outstanding long-term performance in recent years and is increasingly drawing attention from the market and channels. Its founder, Zhou Liang, has over twenty years of experience in the securities industry, having weathered multiple market cycles while preserving strong medium- and long-term investment results.
Meanwhile, Zhou Liang is also someone who often dares to voice his opinions at critical junctures, with a notably high degree of accuracy. In early April last year, when tariff pressures were at their greatest, he boldly stated that “tariff bullying is a paper tiger.” In July last year, when the Shanghai Composite Index was just above 3400 points, he publicly wrote that “the market is still in the early stages of a bull market,” and later market movements matched his predictions exactly.
Zhou Liang's latest views, published on January 8, were once again striking. He clearly stated that the target for this bull market is a new historical high, meaning that the Shanghai Composite Index is expected to challenge the historical peak of 6124 points set in October 2007. How Zhou Liang, known for his rigorous logic, reached this conclusion is of great interest.
1. Low Interest Rates Highlight the Value of the Stock Market
In his latest article, Zhou Liang notes that the historical high for the Shanghai Composite Index was 6124.04 points on October 16, 2007—eighteen years ago. Stock and mutual fund investors have long anticipated a sustained bull market in A-shares. Today, the Chinese stock market has five aces in its hand, which may drive this bull market to a new historic high.
He believes that one of the main reasons driving the stock market to new highs is that falling interest rates have highlighted the value of equities. The current domestic 10-year government bond yield is only about 1.9%. By comparison, the average dividend yield of the CSI 300 Index is 2.5%, already surpassing long-term government bonds. And only 35% of listed companies’ net profits are paid out as dividends—the majority remains within the company. Consider bank wealth management annualized returns of 1.5%, or 1-year deposit rates of 0.95%. Stocks have become very attractive.
Looking at the U.S. market, the S&P 500 Index’s price-earnings ratio is 25 times, dividend yield is 1.2%, and the 10-year U.S. Treasury yield is 4.14%. U.S. rates are more than double China’s; U.S. stocks have 50% lower dividend yields than China, and the PE ratio is 70% higher. Chinese stocks offer better value than American stocks.
2. Abundant Funds Lacking Outlets May Flow into the Stock Market
Zhou Liang also states that real estate has absorbed the most investment funds over the past twenty years. With housing prices having peaked and declining, the real estate market has lost its ability to attract investment capital. In recent years, excess savings have reached 50 trillion, and resident deposits total 162 trillion. Now, the biggest channel to absorb investment funds is the stock market.
When the stock market establishes a profitable trend and stock-based products provide a strong holding experience, funds will flock in. That’s how each bull market unfolds. Institutional investors are attracted by stock valuations and company performance; retail investors come in for the holding experience. If holding makes money, more funds will enter the market.
The CSI 300 Index has risen about 15% annually for the past two years, funds have generally performed well, recovering previous years’ losses. Investors’ holding experience is quickly improving. With many funds lacking new outlets and the stock market’s profit effect accumulating, more funds will be drawn into equities.
3. Stock Market Wealth Effect Poised to Drive the Economy
Zhou Liang also mentions that one of China’s current economic challenges is that falling household wealth has led to weak consumer willingness. Policy has clearly recognized the issue; in April 2024, top-level meetings called for “continuously stabilizing and activating capital markets.” In October last year, authoritative media published articles asserting that a stable stock market is key to underpinning consumer confidence, strengthening consumption through wealth, psychological, and expectation effects.
Zhou Liang believes that when consumption is weak and employment pressure exists, and traditional investment is losing effectiveness, the stock market is an excellent lever. The economic structure is transforming, new productive forces are emerging and progressing well, but it is not instantaneous—it takes time. To boost consumption and stabilize housing, the wealth effect of the stock market is visible in the short term.
Moreover, China’s market is still undervalued, and the wealth effect is just starting to accumulate. The current bull market in Chinese equities carries the mission of absorbing investment funds and generating wealth effects.
4. Corporate Revenue and Profits Resume Growth
Zhou Liang also believes that, according to Minority Capital’s analysis, after nine quarters of negative growth, the overall profits of non-financial listed companies will return to positive growth in 2025, with a clearer upward trend in 2026. UBS also expects MSCI China Index earnings growth to reach 14% or higher in 2026, with momentum mainly from internet platforms, advanced manufacturing, and globally expanding Chinese companies.
Based on this, after nearly a year of leading stock market gains, the return of listed companies' revenue and profit growth confirms economic recovery. This recovery has occurred amid diverse domestic and international challenges, proving China’s economic resilience and intrinsic value, and providing fundamental support for a long-term bull market.
5. New Global Competitive Landscape Emerging
Zhou Liang further points out that from a more long-term perspective, 2026 will be a pivotal year in shifting global competitive dynamics, with subtle changes in the balance of power. In the past 20 years, China has shifted from relative passivity to taking countermeasures, especially after effectively coping with tariff bullying in April 2025, entering a proactive phase. The global balance of power has shifted, and China has entered a more active stage.
He believes that global capital is watching closely as this competition unfolds. Foreign investors, who underweighted Chinese assets in recent years, may reverse course as the situation evolves. As the dynamics between China and the U.S. become clearer, both onshore and offshore capital will increase long-term allocation to Chinese assets. This trend will be long-lasting and sustainable.
6. Bull Market Favors Growth, Tech, and Small Cap Stocks
Zhou Liang also notes that these five long-term changes have not yet been fully reflected in the stock market; market valuations remain low. In the coming years, as the stock market gradually responds, it will drive the market upward, reaching new historic highs and becoming the new main stage for the wealth effect.
He believes that in a bull market, investment should prioritize high-flexibility growth, tech, and small/cap stocks, as these tend to perform more strongly and sharply.
At the same time, value stocks can also be chosen for stable long-term holdings, as they have their own attractiveness in terms of value.
Zhou Liang founded Minority Capital in 2013. The company’s core management team averages over 20 years in the financial industry, and Minority Capital’s investment research team is almost entirely self-trained. Currently, the firm offers strategies focused on small/micro caps, active styles, cyclical growth, traditional stocks, dividend/value, hybrid hedging, quasi-cash management, and more.
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