On June 8th, the three major A-share indices experienced a collective downturn, with the ChiNext Index falling 3.69%, the Shenzhen Component Index declining 3.22%, and the Shanghai Composite Index dropping 1.7%.
Following the market close, ten private equity institutions provided their interpretations of the market performance. These firms widely attribute the current correction to a confluence of factors, including external macroeconomic shocks, excessively high trading concentration in the AI sector, and profit-taking by investors who had previously gained.
Looking ahead, the interviewed private equity professionals believe the likelihood of a continued significant market adjustment is low. Supported by policy backing and robust industry fundamentals, the A-share market is expected to gradually emerge from its volatile range. High-quality sectors and leading companies, backed by solid fundamentals and growth potential, are anticipated to stabilize first.
External Shocks and Crowded Trades Combine to Trigger Correction
From the perspective of private equity firms, the sharp market decline on June 8th resulted from a combination of external and internal factors.
An analyst from Chongyang Investment noted that the day's market plunge was primarily a result of global market联动. On one hand, the leading AI-related sectors, after significant gains from April to May, had reached very high levels of trading concentration, creating a need for adjustment and making the market more sensitive to negative macroeconomic news. On the other hand, the much stronger-than-expected U.S. non-farm payrolls data for May, coupled with persistently high energy prices, have drastically reduced the probability of further Federal Reserve rate cuts, leading the market to price in potential rate hikes.
A representative from StarRock Investment pointed out that from the perspective of external markets themselves, factors including some companies' disappointing earnings guidance, extremely crowded trading in the tech sector, the potential "capital drain" effect from upcoming mega-listings of overseas giants, and the escalating Iran-U.S. tensions—all triggered by the stronger-than-expected U.S. jobs data and market pricing of Fed hikes—led to a noticeable correction in overseas tech stocks. This also highlights the high sensitivity of high-valuation growth sectors to interest rates. For the A-share market, short-term adjustments may occur due to overseas market influence, but industrial development and corporate performance are more critical from a medium-term perspective.
A fund manager from Boke Private Equity indicated that the surface trigger was the global market共振 caused by the stronger-than-expected U.S. May non-farm payrolls, but the deeper cause was the simultaneous sounding of the three notes of the AI bubble. The fundamental shift in AI valuation has moved from "surprise-driven" to "disproof-driven." The three notes of the bubble have transitioned from speculation to reality: first, liquidity tightening, with the 10-year U.S. Treasury yield rising from 4.19% at the start of the year to 4.54%, indicating the bond market is tightening spontaneously even before a Fed hike; second, the "capital drain" from super IPOs, with expected total financing for giants like Alphabet, Anthropic, SpaceX, and Meta exceeding $200 billion; third, narrative fracture, where demand cracks at Broadcom made the market realize that faith in AI capital expenditure is not unshakable.
A partner from Hemu Fund stated that the core reason for today's decline was external macroeconomic shocks combined with rapid deleveraging in crowded AI trades, triggering a sharp drop in A-shares, led by the TMT sector, while banks and oil & gas showed relative resilience. The information transmission chain was: significantly stronger-than-expected U.S. May non-farm payrolls → market rapidly revised up expectations for Fed rate hikes → sharp declines in U.S. tech and semiconductor stocks last Friday spilling over to Japanese and Korean markets → simultaneous contraction in A-share market sentiment and capital flows at open, putting pressure first on AI hardware, semiconductors, and CPO sectors with large prior gains and crowded holdings; concurrently, geopolitical events pushed up oil prices and inflation concerns, leading to relative capital inflows into defensive, value styles like banks and oil & gas, though such inflows were quite limited.
The founder of Ningyongfu Fund expressed that the market trended downward overall today, mainly because U.S. stocks experienced a "Black Friday" last week, with tech stocks undergoing widespread adjustment, becoming the primary cause for the significant correction in A-shares and broader Asian markets today. Behind last Friday's U.S. market plunge were two triggers: disappointing earnings from U.S. AI chip leader Broadcom, and strong U.S. non-farm data boosting expectations for monetary tightening.
The founder of Sirui Investment believes that last week's hawkish monetary pivot from the Fed, the超预期强劲 non-farm data, profit-taking pressure within the tech sector itself, and seasonal liquidity ahead of major sporting events caused the overseas market correction. Today, the A-share market was significantly impacted by overseas markets, leading to a substantial回调.
The founder of Zhiyu Zhishan noted that the cause of the market decline is difficult to pinpoint due to multiple factors, but it currently appears to be primarily influenced by overseas market declines, with the overall overvaluation of small and micro-cap stocks as a secondary factor.
The investment head of Shuipu Fund stated that for this adjustment, the超预期 non-farm data leading to a repricing of interest rate expectations is only part of the reason. More significantly, it stems from the substantial accumulation of profit-taking positions after the sharp rises in April and May, coupled with excessively high trading concentration. From an industry tracking perspective, actual sector景气度 shows no significant change. Rising interest rate expectations will exert some pressure on tech stock valuations, but changes in the discount rate alone will not end an industrial trend. Stock price peaks are more dominated by earnings fundamentals. Currently, this can be viewed as an adjustment following excessive sector gains. Subsequent紧密跟踪 of industry景气度 remains necessary.
Short-Term Volatility Does Not Alter Medium-Term Logic
Regarding the market outlook, private equity institutions generally believe short-term volatility will persist, but they are not pessimistic on a medium-term basis.
An investment manager from Harmony Huiyi pointed out that currently, more than half of all stocks are priced below their levels when the Shanghai Composite Index was at 3,968 points at the end of last year. Nearly 30% of individual stocks have fallen below their prices corresponding to the 3,000-point index level, and about 15% are even lower than their prices at the start of the "9.24" rally in 2024. A large number of mainboard stocks are below their levels from the 2,440-point period. While some companies' profits are still recovering, valuations continue to face pressure, potentially creating "bottom-fishing" opportunities.
The founder of Ningyongfu Fund stated that this phase of rapid decline is neither due to problems in industrial fundamentals nor indicative of systemic risk. Instead, it may create excellent buying opportunities. "We will continue to挖掘 undervalued,优质 companies with stable dividends and持续增长 earnings, staying invested and waiting patiently. From a medium to long-term perspective, the allocation value of China's core assets remains prominent," they said.
A partner from Hemu Fund判断 that the market's room for further short-term decline is not substantial. Regarding future allocation directions, AI technological innovation and growth remain the main theme. Secondly, industries related to both traditional and new energy are still key areas for配置确定性 assets. Finally,布局消费 on the left side is advised. The valuation levels of leading consumer companies already fully reflect market pessimism, and their high dividend yields limit further downside. It is recommended to focus on leading companies in essential消费 and new消费 sectors. A消费 recovery will likely be a structural, not a comprehensive, opportunity.
The founder of Sirui Investment表示 that short-term range-bound volatility is expected, with developments in the Middle East and expectations for liquidity tightening exerting some pressure on the market. However, they are not pessimistic on a medium-term basis. The A-share market rose from 3,347 points to 4,258 points within a year, so a retracement is a normal correction. Policy has not tightened, the "15th Five-Year Plan" and innovation logic remain unchanged, and AI business models are entering a rapid verification period. These factors provide strong support for the market later on.
A representative from StarRock Investment认为 that in the short term, both domestic and international macroeconomic environments and the A-share market's筹码结构 jointly determine its overall震荡, balanced style, and structural adjustment characteristics. Current tech景气度 has not shown an inflection point, while traditional core assets are普遍 undervalued and offer high性价比. Coupled with recent extreme market风格 and维持高位 stock trading concentration, the decline in overseas tech stocks has disturbed A-share sentiment. There may be an endogenous need for风格平衡 within the stock market. From a medium-term perspective, all sectors hold配置 value. Short-term adjustments and valuation digestion do not affect medium-term investment directions.
Balanced Allocation to Navigate Market Fluctuations
Regarding operational strategies in the current market environment, private equity institutions recommend adopting a balanced allocation approach to挖掘 structural opportunities during the adjustment.
An analyst from Chongyang Investment表示 that strategically, they continue with a contrarian investment approach: exiting when a particular style becomes excessively popular and介入 when it is neglected. Specifically, they will actively avoid high-heat sectors, especially those lacking genuine earnings support and driven purely by narrative. Conversely, they will continue focusing on冷门 directions where fundamentals are improving但 market attention remains low, particularly traditional leading companies that have undergone years of adjustment, seen valuations fall to historical lows, and possess stable shareholder回报. These companies offer greater预期差 and higher安全边际. In an environment of increasingly extreme分化, they反而 seek sources of确定性.
The founder of Sirui Investment建议 maintaining a均衡配置, adjusting the structure without过分减仓. The core principle is to avoid "cutting losses" at the emotional冰点 and chasing rebounds at highs. The goal is to adjust the portfolio to a position that can "withstand the wind."
A fund manager from Boke Private Equity建议 that in terms of allocation direction, avoid chasing semiconductors on the rise and instead consider buying leading companies in消费, pharmaceuticals, and manufacturing. These companies have ample cash on their balance sheets, clean financials, and promise higher future returns, while steering clear of the semiconductor sector and overly speculated AI concept stocks.
The founder of Zhiyu Zhishan表示 they are currently primarily看好 investment opportunities in optical modules and cyclical stocks like copper and aluminum. They believe AI development is just beginning, and these represent competitive segments within A-shares related to the global AI field at reasonable prices. Their firm has been researching these directions since 2023 and sees significant opportunities there. Simultaneously, they are actively布局 opportunities in A-share innovative pharmaceuticals.
Dan Shui Quan stated that the firm focuses on the确定性 of fundamental growth, actively seeking opportunities where预期差 still exists between market perception and reality in relatively uncrowded directions. For example, within AI computing infrastructure, they关注 companies in the electronics and power equipment sectors that still possess持续表现潜力. Another direction is, based on a contrarian布局思路,提前挖掘细分龙头 in currently low-attention areas with good fundamental growth potential but尚未充分定价, such as leading companies in the resource metals领域 offering good性价比 and high增长确定性.
The investment head of Shuipu Fund认为 that currently, the entire market is震荡 to消化前期涨幅, with the AI sector entering the mid-year earnings verification window. The行情 will likely be characterized by结构性分化: leading companies that deliver on earnings and experience both volume and price increases will show stronger抗跌性 and still have good upside potential subsequently. Smaller and mid-sized标的 relying on narrative without subsequent earnings兑现 depend more on sector beta and are not advantageous during adjustment phases. As mid-year reports are released later and the market enters the second half, valuation切换 may occur. High-quality leading companies will also present better配置 opportunities during the recent adjustment process.