Beijing – September 19, 2026 -- Investors in China's A-share market turned more cautious in the third quarter of 2026 even as corporate earnings began to recover, according to the latest CKGSB Investor Sentiment Survey covering the May-to-September 2026 period.
Investors cut return expectations and stock allocation plans
Only 58.6% of respondents expected A-share prices to rise, down 5.2 percentage points from April 2026. The expected rate of return fell 1.8 percentage points to negative 0.7%. Appetite for direct stock investment weakened sharply, with the net proportion of investors planning to increase stock holdings falling 7.3 percentage points to 10.7%; the equivalent figure for equity funds dropped 1.2 percentage points to 13.4%.
Trading turnover rises far faster than valuations
Turnover ratios climbed from 2.39 to 4.2 on the Shanghai Composite Index and from 5.84 to 8.5 on the Shenzhen Composite Index between December 2024 and August 2026. Price-to-book ratios rose only modestly over the same period, from 1.13 to 1.25 in Shanghai and from 1.93 to 2.4 in Shenzhen. Liu Jing, CKGSB Professor of Accounting and Finance and leader of the survey, said the pattern reflects sharp divergence among investors over whether current prices represent value or risk, rather than broad-based optimism.
Corporate profits rebound after nearly three years of decline
Year-on-year trailing twelve-month net profit growth among A-share listed companies reached 5.9% in June 2026, marking a turnaround after remaining negative from June 2022 through March 2026. Private enterprises posted 36.7% net profit growth in the second quarter of 2026, while strategic emerging industries recorded 36% growth over the same period.
Household consumption and property market remain weak spots
The survey points to softer household consumption and a prolonged property market adjustment as sources of fragile confidence beyond equities. It also flags a structural imbalance in capital allocation: financial capital continues to flow disproportionately toward government entities and state-owned enterprises rather than private firms and consumers. Because government bodies and SOEs primarily support the investment side of the economy, the survey concludes that directing further capital to the public sector is unlikely to resolve China's insufficient demand and consumption.