Guosen Securities: DDM model points to A-share upside on earnings, rates, risk appetite
Guosen Securities chief economist Xun Yugen published a September 18, 2026 report arguing that China's A-share market has upside potential based on the Dividend Discount Model. The report cites three factors: double-digit net profit growth (15.9% year-on-year in H1 2026), a 16-basis-point decline in the 10-year government bond yield to 1.7%, and rising global risk appetite. It notes A-share risk premiums remain below historical averages and compares the current phase to the 1999 '519' rally.
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Guoxin Securities: DDM Model Suggests A-Share Market Has Upside Potential in 2026
A research report by Guoxin Securities' chief economist Xun Yugen and team, dated September 18, 2026, argues that China's A-share market has significant upside potential based on the Dividend Discount Model (DDM). The report identifies three supporting factors: first, A-share net profit is growing at a double-digit rate, with first-half 2026 aggregate net profit up 15.9% year-on-year and ROE rising for the first time since 2022. Second, the 10-year Chinese government bond yield has fallen 16 basis points to 1.7% year-to-date, lowering the discount rate and encouraging long-term capital inflows, particularly from insurers. Third, global risk appetite has risen in 2026, as seen in strong overseas equity and commodity returns, while A-share risk premiums remain below historical averages, suggesting room for improvement. The report compares the current market phase to the 1999 '519' rally and the 2001 correction, describing the present as the end of a wave-4 correction and the start of a wave-5 advance. It acknowledges recent investor pessimism and a sharp decline in trading volume.
Guosen Securities: DDM Model Supports A-Share Gains on Earnings, Rates, Risk Appetite
An analysis by Guosen Securities, published on East Money, argues that three factors from the Dividend Discount Model (DDM) support a year-end rally for China's A-share markets. First, net profits for all A-shares grew 15.9% year-on-year in the first half of 2026, with ROE rising for the first time since 2022. Second, the 10-year Chinese government bond yield has fallen 16 basis points to 1.7% since the start of the year, lowering the discount rate and encouraging insurance funds to increase equity allocations; insurers have already added 479.5 billion yuan in the first half. Third, global risk appetite has risen, with overseas equities and commodities (crude oil up 79%, copper up 12%) posting strong gains, while A-share risk premiums remain below historical bull-market peaks, suggesting room for improvement. The report compares the current market phase to the 1999 '519' rally and, using wave theory, identifies the present as the end of a fourth-wave correction and the start of a fifth-wave advance. Risks cited include weak fundamental improvement and geopolitical impacts on sentiment.
Guosen Securities: DDM Model Analysis Supports A-Share Market Uptrend This Year
This article from East Money, attributed to Guosen Securities, applies the Dividend Discount Model (DDM) to argue that A-shares are poised to rise in 2026. The analysis identifies three supporting factors: first, net profit growth for all A-shares in the first half of 2026 reached 15.9% year-on-year, with technology sectors leading and profit improvement broadening. Second, the 10-year Chinese government bond yield has fallen 16 basis points to 1.7%, lowering the discount rate and encouraging insurance capital inflows, with insurers adding 479.5 billion yuan in the first half. Third, global risk appetite has risen, as seen in strong overseas equity and commodity returns, while A-share risk premium remains low at the 31st percentile historically, suggesting potential for recovery. The report compares the current market to the 1999 '519 rally' and, using wave theory, suggests the market is in the early stage of a fifth wave up from a fourth-wave low. Risks cited include weak fundamental improvement and geopolitical impacts.
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Guosen Securities Chief Economist Xun Yugen: DDM Model Suggests A-Shares Have Upside Potential
Xun Yugen, chief economist of Guosen Securities, argues that A-shares have the potential to rise based on the Dividend Discount Model (DDM). He cites three supporting factors: first, A-share net profits grew by double digits year-on-year in the first half of 2026, with the technology sector leading gains. Second, the 10-year Chinese government bond yield has fallen 16 basis points to 1.7% since the start of the year, lowering the risk-free rate and encouraging long-term fund inflows, particularly from insurance funds which saw net inflows of 479.5 billion yuan in the first half. Third, global risk appetite has increased, with overseas equities and commodities like crude oil (up 79%) and copper (up 12%) posting strong gains, while A-share risk premium remains below historical averages, suggesting room for improvement. Xun notes that A-share trading volume has shrunk over 50% from its June peak, but expects sentiment to recover. He compares the current market to the late February 2001 phase of the 1999 bull market, concluding that the three DDM factors support a year-end rally.
Xun Yugen: DDM Model Analysis Indicates A-Share Market Should Rise in 2026
In an article published on NetEase Finance, Xun Yugen, chief economist at Guosen Securities and director of the China Chief Economist Forum, argues that the A-share market has upside potential based on a Dividend Discount Model (DDM) analysis. He identifies three supporting factors: first, A-share net profit growth has reached double digits, with the full-A-share market net profit attributable to parent companies rising 15.9% year-on-year in the first half of 2026, and profitability breadth improving. Second, the 10-year Chinese government bond yield has declined 16 basis points to 1.7% since the start of the year, lowering the discount rate and encouraging long-term capital inflows, particularly from insurers who have already added 479.5 billion yuan in equities. Third, global risk appetite has risen in 2026, with overseas equities and commodities posting significant gains, while A-share risk premiums remain below historical averages, suggesting room for improvement. Xun compares the current market to the early stages of the fifth wave in Elliott Wave theory, likening the post-September 2024 rally to the 1999 '519' rally. He cautions that risks include weak fundamental improvement and geopolitical impacts on market sentiment.