The forgotten fundamentals
In a matter of days, the mood of China equities investors has swung from extreme despair and pessimism to rising positivity, fresh hopes, and even scattered euphoria.
China’s economy, policymaking, property market, stock market, business expectations and investor expectations have entered a new phase. This is not another false dawn. We believe there is a 70% or higher chance that we are on the cusp of “The” inflection from a bearish hibernation into a bull run that has more legs, with earnings likely growing 10%–20% a year for the next three years from a low base, with P/E ratios rising to 15x–18x from just over 10x currently.
