"Top Private Equity's View on A-share 'Good Start': What to Watch After 4000 Points?"

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The first trading day of 2026, A-shares enjoy a strong surge!

On January 5, the Shanghai Composite Index achieved “12 consecutive gains,” and, after 34 trading days, reclaimed the 4000-point barrier.

Market trading sentiment has obviously heated up, with the combined turnover of Shanghai and Shenzhen reaching 2.57 trillion yuan and over 4,100 stocks across the market rising.

From the market structure, industries showed a general upward trend, with insurance, medical devices, and memory sectors leading the gains.

Above the 4000-point level, the market's real concerns are changing: What is fueling this round of gains? Which directions have verifiable support, and what risks need to be priced in advance?

Zishitang has compiled insights from well-known private equity firms around the start of the year, especially their “opinions” after the first trading day’s close.

There is a striking consensus: In 2026, A-shares will see a contest over company profitability, market structure, and investment rhythm.

The profitability cycle has already bottomed out and is rebounding

Among the views of multiple institutions, “profitability” has once again become the core keyword.

StarRock Investment predicts that 2025 is probably the bottom of this round of A-share profitability cycle, with a solid performance foundation built. Future earnings clues are expected to gradually become clear and spread, providing fundamental support for the market. The market will gradually move away from simple liquidity-driven valuation surges, and performance releases will drive related sectors to new heights.

Structurally, StarRock Investment pointed out that high-prosperity, trend industries have limited room for further valuation increase, and the key is to find companies that can truly deliver high earnings growth. Their focus is on two main lines: First, industries with high-prosperity trends represented by AI, innovative drugs, machinery equipment, and military industry; second, industries with improving supply-demand relations such as transportation, discretionary consumption, and real estate.

The commonality in these views is that the market is no longer simplistically divided into growth and value, but instead returns to the fundamental logic of “who can deliver profit.”

The AI industry enters the “validation period”

AI remains the most unavoidable variable for 2026, but many institutions’ statements are clearly different from previous years’ single-theme speculation.

Qinmu Asset believes that the domestic substitution industry chain will become one of the market's main lines in 2026, while AI applications officially take center stage. They mentioned META’s huge acquisition of Manus, highlighting the resilience and strength of domestic AI application companies. At the same time, industries such as large consumption are also gradually recovering; opportunities are not, and should not be, concentrated only in a few sectors.

From a macro perspective, Liang Wentao of Honghu Fund pointed out in an after-market article that overseas, US tech giants, driven by “fear of missing out,” are sharply increasing capital expenditures and AI is entering a key validation period. Meanwhile, the complex situation of employment and inflation makes the Fed's policy path highly uncertain. In this environment, high asset volatility may become the norm, and the market contains more opportunities for structural returns.

This means AI is no longer just a concept but now faces multiple tests of industrial progress, capital expenditure, and macro conditions.

Divergence and return in Pharmaceuticals and Consumption

The recovery in some sectors is not broad-based but the result of intense differentiation.

Juming Investment systematically reviewed the pharma sector’s cycle. They noted that although aging should increase demand for pharmaceuticals, China’s payer structure means the Healthcare Security Administration is the main purchaser; from 2022 to 2024, pharma became one of the worst-performing sectors in all A-shares.

The turnaround came from going overseas, with a batch of innovative drug companies selling overseas rights to new drugs at high prices through ongoing R&D, making innovative drugs one of the best-performing sectors in 2025.

After an industry-wide surge in Q2 and Q3 of 2025, followed by a Q4 correction, Juming believes that in 2026, opportunities in innovative drugs outweigh risks, but divergence will be sharper. Only companies with real R&D capabilities will gradually become internationalized innovative drug firms, making pharma investment even more dependent on individual stock selection.

In the consumer sector, last year’s star private equity firm Fusheng Asset kept emphasizing the structural logic of “new consumption.” They believe that as household incomes and product quality rise, basic material needs have been met, and consumption is shifting toward experiences, socialization, and upgraded lifestyles. As house-buying demand gives way to other aspects of life, consumer forms will naturally flourish.

The commonality in these views is that the industry itself is less important; what matters is whether there are sustainable structural winners within.

Relative advantage of Chinese assets

As the index breaks through key levels, many private equity firms are also reminding investors to lower their sentiment leverage.

Renqiao Asset pointed out from a contrarian perspective: as global equities keep hitting new highs, vigilance remains necessary, with the greatest risk coming from a reversal of the AI narrative. Yet, by global comparison, they think China’s stock market scenery is the best. Still, in the second half of the rally, restraint and lowered expectations are the keys to surprises.

Veteran private equity Ching He Spring Capital takes a longer-term view, believing A-shares may gradually reshape the short bull-long bear market pattern, potentially switching to profit-driven growth in the short term, with allocation value still considerable. Their focus is on structural opportunities such as strategic resources stocks, global capital goods, and resilient domestic demand products.

The core of these comments is to remain bullish on Chinese assets while staying respectful of process and rhythm.

Maintain risk awareness

At the strategy level, quant and allocation consciousness are repeatedly mentioned.

CICC Wealth pointed out after market close that since 2019, quant strategies have repeatedly weathered various cycles and proved their allocation value through sustained excess accumulation. In 2026, so long as there aren't extreme market moves, quant strategies may still outperform the average level of active equity strategies.

This high-net-worth wealth platform also reminds that the multiple steep declines in 2025 have already shown the market does not always rise unilaterally. Have conviction, but also reverence; don’t put all expectations in one direction; good asset allocation is key to handling uncertainty.

From 4000 points, the market doesn’t give an answer—rather, a new multiple-choice question. What truly determines the outcome is still the depth of understanding regarding structure, rhythm, and risk.

Risk Warning and DisclaimerThe market has risks; investments should be made cautiously. This article does not constitute personal investment advice, nor does it consider the specific investment objectives, financial situations, or needs of individual users. Users should assess whether any opinions, views, or conclusions expressed herein fit their particular circumstances. Investments made accordingly are at your own risk. ```