Industrial analyst Zhang Yidong: A shares and Hong Kong stocks will enter a super bull market of 20 years.

Industrial's global chief strategy analyst Zhang Yidong said that a super long bull market for Chinese equity assets, including A-shares and Hong Kong stocks, may unfold over a period of more than twenty years. For example, many people doubt the so-called "cold kings" of domestic computing power are too expensive and have bubbles. We need to look at the issue with a development perspective. Its benchmark role is like the "stupid melon seeds" in the early days of reform and opening up, or the continuous surge in housing prices in first-tier cities driving the entire real estate sector, which played a role in promoting various aspects of the Chinese economy at the time. At that time, the real estate sector played a role in promoting various aspects of the Chinese economy, but it is not recommended for everyone to blindly chase highs, just that this phenomenon has historical significance. Just like the houses in Shanghai in the 2000s, they were always considered expensive, with people always saying that rental yield did not match income. Now that income matches, rental yields are high, and people are not buying. This is actually a trend of the times, we need to look at the issue with a development perspective. This super long bull market is called "the times create heroes". Absolutely do not expect this bull market in China to be a crazy or fast bull market, it is impossible, it will definitely be a long bull market. The biggest difference this time compared to previous times is the influence and guidance of the national power. Lessons will be learned from the crazy bull market of 2014-2015 - the leveraged bull market ultimately resulted in a mess, with the government having to use a lot of resources to save the market, which was a painful lesson. I metaphorize this bull market in the Chinese stock market (A-shares and Hong Kong stocks) led by the national power as a "little white rabbit-style bull market". The little white rabbit rushes and runs fast in the tortoise and hare race, then takes a nap to adjust, wakes up refreshed and runs again, then sleeps and runs again. This Chinese-style "little white rabbit bull market" is characterized by stage-wise rapid rise and adjustment, step by step upward. The bull market in the United States is a turtle-style slow bull market. The way this bull market in China is going is similar to the real estate market from 1998 to 2020, a prosperous real estate bull market for over twenty years: fast-paced, high heat, policy pressure when necessary; cold, policy support, moving forward in this shakiness. This bull market is not for a few speculators or wealthy capitalists to exploit the national resources, but to invigorate social wealth through the bull market, helping to improve the balance sheets of local governments, companies, and residents. Through this market trend, local government-related assets will be listed for cashing out. The Chinese stock market before 2023 and the Chinese stock market after 2023 are two different markets. Before 2023, there was talk of learning Western models at the slightest provocation, talk of the Chinese stock market being an emerging and transitioning market, feeling immature and needing to learn from mature Western markets. But there was a qualitative change in 2023. The central financial work meeting in 2023 made it clear that fundamentally we are different from the Western financial model, we act in the interest of righteousness, not just for profit. Acting in the interest of righteousness means looking at the national righteousness, the long-term perspective of the country, and how to better enhance the welfare of the entire nation. There is no need to envy, be jealous or hate the short-term herd mentality. Many people are anxious when the market rises quickly, fearing that if they don't enter soon, the bull market will end. I say the bull market is far from over, it could be a 20-year bull market, so what's there to worry about? Focus more on the assets themselves, rather than being afraid of missing out on a rise or being trapped by a fall. One of the characteristics of the long bull market in Hong Kong: embracing the motherland, national empowerment. The first characteristic of Hong Kong is embracing the motherland, national empowerment. Secondly, from a fund perspective, both Hong Kong stocks and A-shares will benefit from the large trend of Chinese social wealth (especially residential wealth) moving from safe assets to stocks and equity assets. Thirdly, the ecological environment of Hong Kong stocks is accelerating a virtuous cycle, which is different from the period from 2021 to early 2024. Fourthly, an important feature of this round of the long bull market in Hong Kong stocks is the shift in the underlying investment logic from foreign-dominated offshore marketization to a Chinese pan-Chinese capital circle, the Chinese and Chinese friends, or the pan-Chinese capital-led onshore marketization. Many investors always ask me when foreign capital will come in, as if there will be no market in A-shares and Hong Kong stocks without foreign capital. This mindset is still stuck in the mindset of a small country and few people, without realizing that we are already the world's second-largest economy, and our social wealth is astonishing on a global scale. The economic landscape of China is absolutely not like Japan in the 1990s or 2000s. What are we more comparable to? I believe China is more comparable to the United States in the late 1980s to early 1990s before the rise of the internet wave. Now in China, whether it's technology, new consumption, innovative drugs, or many structural bright spots, they can be said to be emerging one after another. So there is no need to pay too much attention to the macro, just keep it stable - neither will it crash nor be hot, moving towards high-quality development in a gentle manner. Given time, as the money-making effect of the long bull market in China continues, the money will come back from the Middle East, Europe, even Wall Street, and the hedge funds in the United States will also come to make money. This is a virtuous cycle of the ecological environment.