H2 2026 A-Share Investment Strategy

Looking into H2 2026, the central tension in A-shares is shifting from liquidity-driven to earnings-driven pricing. Corporate earnings bottomed in Q1 and are recovering quarter by quarter, led by export chains and equipment renewal; liquidity remains accommodative, but the incremental flows are increasingly institutional, favouring companies that can deliver on results. The index may not go far, and structural trades should remain the main theme.

We recommend two allocation lines. The first is high-end manufacturing and go-global chains with upward earnings revisions, where overseas capacity build-out offers a second growth curve. The second is dividend assets that score high on both yield and free cash flow, providing ballast as volatility rises. The key risks are renewed friction in the trade environment and crowded thematic trading — drawdown control matters more than chasing elasticity.