2025-12-01 03:18Investment Rating - The report suggests a bullish outlook for the Chinese stock market, indicating potential for a long-term bull market driven by structural factors in both the asset and funding sides [2][3][8]. Core Insights - The report emphasizes that the long-term bull market in the Chinese stock market requires a combination of asset-side and funding-side factors, with globalization enhancing both aspects [3][18]. - It highlights that despite a decline in economic growth rates, stable profit growth and elevated valuation levels can sustain a bull market, drawing parallels with historical experiences from developed countries [15][22]. - The report identifies key drivers for the A-share market's upward momentum, including growth potential, high-quality overseas expansion, and improvements in corporate governance [4][5][6][7]. Summary by Sections Growth Potential - The report discusses the transition towards a more efficient economy, driven by innovation and research, as the financial cycle shifts downwards [4][24]. - It notes that China's R&D expenditure as a percentage of GDP has reached 2.6%, aligning with developed countries, and highlights the increasing complexity of the economy [25][30]. High-Quality Overseas Expansion - The report states that China is actively expanding through trade and investment, with high-tech and high-growth companies increasingly exposed to international markets [5][33]. - It mentions that the share of overseas revenue for specialized and innovative companies has risen significantly, indicating a shift towards global markets [35][39]. Corporate Governance Improvements - The report outlines various policies aimed at enhancing corporate governance, increasing transparency, and encouraging dividend payouts, which are expected to improve overall market returns [6][43]. - It highlights that the contribution of dividends to total returns in the A-share market has been low but is improving due to recent reforms [48][49]. Global Long-Term Funding - The report emphasizes the importance of stable long-term funding, particularly from insurance and pension funds, in supporting the bull market [7][57]. - It notes that global capital rebalancing may lead to increased foreign investment in the Chinese market, enhancing liquidity and valuation [61][63].