While the Shanghai Composite Index revisits the 4,000-point level, its current fundamentals and valuations are markedly stronger than during the 2015 peak. Investors should focus less on index levels and more on structural opportunities emerging from China's manufacturing upgrade, corporate globalization, and edge AI applications, with selective attention to oversold rebounds post-Q3 earnings season.

**2025 vs. 2015: Key Differences at the 4,000-Point Mark** 1) **Index Methodology Reform**: The 2020 revision to the Shanghai Composite's compilation rules reduced the drag from newly listed stocks by extending inclusion timelines (3-12 months vs. previous 11 trading days) and adding ST stock removal mechanisms.

2) **Fundamental Growth**: Since Q2 2015, the index's aggregate market cap grew 82% (6% annualized), while net profits surged 114% (7.7% annualized). EPS rose 27% (2.4% annualized), with Q3 2024 marking a renewed EPS growth cycle.

3) **Market Leadership**: 40% of constituents now trade above their 2015 peaks, with top 10% performers contributing 72% of total market cap growth. Post-2023 IPO policy changes shifted growth drivers back to existing companies (+CNY10.98T in 2025 vs. new listings' CNY0.37T contribution).

4) **Sector Reshuffle**: Tech sectors (electronics, communications, computers) now comprise 33% of index weight (+22.1ppt since 2015), replacing financials (-5.5ppt) and energy (-4.7ppt) as dominant forces.

5) **Global Expansion**: Overseas revenue share for non-financial constituents rose from 13% to 19%, reducing domestic cyclical exposure (property-related sectors shrank from 14.5% to 5.5% of index weight).

6) **Valuation Discipline**: At 4,000 points, the 2025 median P/E of 28.9x is less than half 2015's 66.6x. Non-financial earnings grew 2% YoY in 2025 (vs. -9.8% in 2015), with ex-property sectors up 3.7% (-11.4% in 2015).

**Post-Q3 Earnings Strategy** 1) **Structural Over Timing**: With US-China tensions entering a "managed competition" phase until mid-2026 elections, focus on corporate globalization trends while monitoring oversold tech, new energy, and biotech opportunities.

2) **Three Key Themes**: - **Manufacturing Upgrade**: Target traditional industries (mining, chemicals, machinery) with global pricing power and high reinvestment capacity. - **Globalizing Chinese Firms**: Prioritize companies demonstrating cross-border execution in IP, supply chains, and consumer brands. - **Edge AI**: Physical-world data interfaces present the next commercialization frontier for AI applications.

3) **Tactical Rebound Plays**: Post-earnings opportunities include: - Liquor stocks showing price stabilization after earnings adjustments - Software firms demonstrating profit inflection points - Biotech firms with upcoming clinical catalysts in November

**Risk Factors**: Escalating US-China tensions, weaker-than-expected domestic demand recovery, liquidity tightening, or geopolitical conflicts could disrupt market stability.