$Contemporary Amperex Technology (300750.SZ)$ $LONGi Green Energy Technology (601012.SH)$ $Kweichow Moutai (600519.SH)$
The Shanghai Composite Index rose by an average of 4.8% in 2021, the constituent index increased by 2.67%, the ChiNext Index surged by 12%, while only the CSI 300 Index fell by 5.2%. The CSI 1000 Index led the gains with a remarkable increase of 20.52%. The A-share market recorded a rare three-year consecutive positive annual performance, breaking its historical consistent record. Small and mid-cap stocks were the top performers throughout the year.
Looking ahead to 2022, our outlook differs from the cautious expectations held by most investors in the market. The author believes that the first long-term bull market cycle of the A-share market, marked by the end of the peak period of financial supply-side reforms, will continue to progress in 2022.
01 Spring Fades, Summer Arrives
At the beginning of the 2019 bull market, we elaborated on and forecasted the logic behind this bull market, which has been consistently upheld and has since evolved. On the first trading day after the pandemic in early 2021, we publicly released our investment strategy outlook for 2021. Let’s revisit the firmness of our stance at that time:
Therefore, the starting point of this bull market was a reversal phase that began after the financial supply-side reforms. Policies have continued to provide support since 2019, culminating in the Central Economic Work Conference at the end of 2021, which emphasized rectification, real estate policies, and the importance of stabilizing economic growth and safeguarding demand. Against the backdrop of already moderate valuations in the capital markets, a more optimized macroeconomic structure, and subdued speculative fervor in the real estate sector, the capital markets have become a primary destination for funds and a vehicle for common prosperity...