Zhang Yu, chief economist at Huachuang Securities, said that rebuilding confidence in the capital market will take a long time to focus on corporate profits and industrial innovation. Industrial innovation empowers the long-term value of A-shares, essentially by effectively transforming “growth” into “profitability,” so that the rise in the index is profitably supported and has a foundation for the industry. The midstream equipment manufacturing industry, or even the new economy in a broader sense, is the clearest carrier under this logic. Zhang Yu said that the carriers of industrial innovation, the midstream equipment manufacturing industry and the broader new economy, are restructuring the profit structure and valuation anchor of A-shares. The increase in industrial competitiveness and added value has led to an increase in profit margins and ROE, which in turn has led to a long-term rise in the market capitalization share of the new economy and the center of the index. Improving the system provides an environment for the market, and industrial innovation provides profits for the market. If the two work together, the long-term value of A-shares will become more and more entrenched.

Disclaimer:Webull uses external vendor Google Translation Service for news translations where we endeavour to ensure these are correct, however, we recommend that you please double-check this information accordingly. Webull is not responsible for translation errors or issues.