Multiple Private Equity Firms Release Major Analysis: Capital Markets Prioritize "Stability," Where Are the Opportunities?

21st Century Business Herald Reporter Yang Nana

At a special juncture marking the start of the “14th Five-Year Plan,” the 2026 National People’s Congress has outlined a new development blueprint for the capital market. CSRC Chairman Wu Qing also stated at the Fourth Session of the 14th National People’s Congress Economic Press Conference that efforts will be made to improve the construction of a characteristic stable market mechanism, enrich tools and mechanisms for cross-cycle and counter-cyclical adjustments, and enhance the market’s inherent stability.

This is not only a short-term confidence boost but also a medium- to long-term reform related to reshaping the market ecosystem. Regulators are elevating the stability of the capital market to the level of macroeconomic regulation, a shift with profound significance amid complex geopolitical and external environments. From improving the “long-term investment” mechanism to refining the “1+N+X” system for private equity, regulators seek a delicate balance between nurturing and regulation.

Meanwhile, the government work report sets an economic growth target of 4.5%-5%, with fiscal resources shifting from “investment in goods” to “investment in people,” providing new macro coordinates for private equity firms to reassess asset allocation logic.

From “emergency measures” to “mechanism building,” and from “scale expansion” to “regulated development,” mainstream private equity institutions believe that the capital market is undergoing a profound restructuring based on “stability” as the foundation and “quality” as the direction. This will inject strong certainty into the long-term trend of the A-share market.

Institutionalization of the “Market Stability Mechanism” and a “Bottom” Consensus

Wu Qing’s proposal to “improve the construction of a characteristic stable market mechanism” has attracted high attention from leading private equity firms. Unlike previous temporary measures, this statement is seen by industry insiders as a significant signal that market stability will be incorporated into the overall macroeconomic regulation framework.

Fresh Water Spring Investment believes that, in the context of complex geopolitics and intensified external fluctuations, this statement acts as a “stabilizer.” By enriching cross-cycle and counter-cyclical adjustment tools, regulators convey a clear message that “stability is the overall situation and a prerequisite.” The shift from reactive stabilization to institutionalized stability, coupled with the establishment of a “long-term investment” ecosystem, is strongly consolidating the medium- to long-term trend of market stability.

Zou Jun, Chairman of Shengtian Investment, further interprets that prioritizing “a more resilient and robust market” in the “14th Five-Year Plan” is highly significant. “This indicates that maintaining market stability has risen from emergency measures to the level of mechanism construction,” Zou said. “Under the high-level care of the state, the resilience of the A-share market will significantly strengthen, and the direction of ‘bottom support and upward potential’ will be very clear, laying a solid foundation for a long-term bull market.”

Chongyang Investment further analyzes the core of this mechanism. They believe that the essence of the characteristic stable market mechanism in China is to break the vicious cycle of extreme market volatility. During periods of low market sentiment and irrational overselling, tools such as “national teams” supporting the market, guiding medium- and long-term funds into the market, and strengthening expectation guidance are used to firmly establish the market’s bottom line, stabilize investor confidence, and prevent systemic risks from spreading. Conversely, when market sentiment is exuberant, with excessive speculation, crowded trading, and bubbles, strict regulation is used to curb illegal trading, regulate leverage, and balance supply and demand, cooling market sentiment and preventing sharp corrections after rapid surges.

Chongyang Investment points out that this mechanism directly addresses the deep-rooted issues of “short-lived bull markets and long bear markets” in A-shares. By smoothing extreme fluctuations, cultivating a market ecology of long-term and value investing, and continuously strengthening the market’s endogenous risk resistance, it ultimately promotes a slow and sustained bull market.

Xingshi Investment adds from the perspective of investor behavior that Wu Qing’s clear stance helps stabilize expectations for medium-term stock market trends. Amid the broader trend of residents “moving their savings,” this stability in expectations will enhance residents’ confidence in investing in stocks and encourage long-term capital inflows, supporting a stable valuation center and allowing more residents to share in the achievements of the real economy and capital markets.

With the improvement of the cross-cycle adjustment mechanism, the likelihood of sharp market rises and falls is expected to decrease, and focus on short-term volatility will diminish. Xingshi Investment states that the investment logic of the stock market will anchor on medium-term performance and growth prospects. Under the backdrop of a resilient domestic economy gradually achieving high-quality development, as corporate competitiveness and earnings capacity improve, a “slow bull” in the medium term is worth expecting.

Regarding the private equity sector itself, Wu Qing explicitly proposed to improve the "1+N+X"制度体系 and crack down on illegal fundraising and利益输送行为. Fresh Water Spring Investment notes that the core of regulation is to optimize structure and improve quality. Under the “1+N+X” framework, private equity firms with solid research capabilities and prudent compliance will gain more development space, guiding the industry into a more规范 and high-quality development phase.

As a venture capital firm focused on early-stage, small-scale, and hard-tech investments, Yingfutai Ke is particularly encouraged by Wu Qing’s statement on “expanding VC and PE exit channels.” The firm points out that “establishing a long-term investment mechanism” and “enhancing制度包容性, expanding VC and PE exit channels” hit the key points and pain points of supporting technological innovation. Especially after the tightening of IPO policies in 2023, the resulting “bottleneck” in exits has significantly impacted VC and PE fundraising, investment, management, and exit cycles.

The meeting also proposed深化科创板 and ChiNext制度改革, opening green channels for tech startups to go public, and introducing policies to encourage listed companies to re-finance and provide financial tools for M&A. In Xingshi Ke’s view, these new制度措施 are targeted at industry pain points and are expected to be implemented promptly.

From “Investing in Goods” to “Investing in People”: The Structural Significance of Fiscal Policy

Beyond direct statements on the capital market, several private equity firms offered macro- and micro-level interpretations of the government work report’s 4.5%-5% economic growth target and fiscal policy arrangements.

Zhang Zhiwei, President and Chief Economist of Baoyin Investment, states that this target is pragmatic and rational, reflecting a clear focus on quality over speed. The range considers employment,民生, and long-term development needs, leaving ample policy space to respond to external uncertainties, reduce leverage, control risks, and adjust结构. Bao Xiaohui, Chairman and Investment Director of Changli Assets, also believes that this target balances effective quality improvement with reasonable quantitative growth, showing a pragmatic and proactive attitude. “It indicates that our economy will continue to stabilize.”

Xu Siyang, Chief Investment Officer of Yinye Investment, notes that setting GDP growth within a 0.5% range is uncommon and is a pragmatic response to the higher uncertainties expected in 2026. Zou Jun believes that after two consecutive years of setting the GDP growth target at around 5%, the 4.5%-5% range for 2026 is more pragmatic and offers greater policy flexibility.

“The moderate downward adjustment of the current actual GDP growth target provides more policy space for industries to reduce overcapacity, which is conducive to stabilizing prices and nominal GDP, improving corporate profits, and enhancing the public’s perception of the economy.”

Zou Jun also points out that the data showing a deficit of 5.89 trillion yuan in 2026 and the general public budget expenditure reaching 30 trillion yuan for the first time indicate that, although fiscal policy力度 is slightly milder than last year, the absolute level remains increased, laying a foundation for achieving this year’s economic growth target. Qi Kaomin, Chairman of Dahua Xin’an, adds that a deficit ratio of around 4% combined with 1.3 trillion yuan of ultra-long special bonds aligns long-term funds with long-term projects, balancing growth stabilization and risk prevention.

Chongyang Investment notes that this growth target, returning to a range setting, has a midpoint slightly lower than last year’s 5%. This aligns with market expectations. The reasons for the adjustment include: firstly, the “Suggestions” from the Fourth Plenary Session of the 20th CPC Central Committee mention that an average annual growth rate of 4.17% over the next decade is necessary to achieve the 2035 per capita GDP target; the lower limit of 4.5% meets this requirement and is a pragmatic response to complex external environments. Secondly, reform and innovation are high-frequency words in this government work report, and flexible range-based growth targets help leave room for structural adjustments and reforms.

Yang Bo, Director of Zhenzhe Investment, offers a deeper interpretation of the policy logic. He believes that the policy priority has shifted from simply pursuing actual GDP growth to reshaping expectations, combating deflation stickiness, and reconstructing social incentives. More importantly, fiscal resources are undergoing structural adjustments, shifting from past “investment in infrastructure” to “investment in people, promoting consumption, and safeguarding民生.” Through measures like old-for-new upgrades, establishing a 100 billion yuan special fund to stimulate domestic demand, and offering consumer loan interest subsidies, the goal is to directly repair residents’ balance sheets, laying the groundwork for asset revaluation in the capital market.

Xingshi Investment’s latest investment note points out that domestic inflation is gradually rising. From the supply side, the significant slowdown in manufacturing investment growth last year reflects ongoing supply-side optimization; demand signals are also positive, with preliminary stabilization in real estate and active春节消费 data. “Under the background of continuous supply-side improvement, the emergence of demand recovery will further support price level restoration.”

Meanwhile, Xingshi Investment emphasizes that the continued appreciation of the RMB and inflows of cross-border funds are expected to lead to market revaluation. The People’s Bank of China lowered the forward foreign exchange risk reserve ratio in February, reflecting confidence in RMB appreciation and expectations of further strengthening, which will stabilize cross-border capital inflows.

Investment Themes and Allocation Strategies: The Long Wave of Technology and Defensive Short-term

Regarding future investment directions, private equity firms generally focus on new productive forces and industrial restructuring, while maintaining flexible short-term allocation strategies amid geopolitical disturbances.

Yang Bo believes that the “14th Five-Year Plan” points to dual opportunities. First, “countering internal competition” will promote profit margin recovery for leading enterprises; second, new infrastructure projects like “computing and electricity synergy” will bring certain capital expenditure increases. As new productive forces accelerate, Chinese assets are entering a historic period of structural revaluation.

Xingshi Investment currently emphasizes two main investment themes. One is industry investments in high-growth sectors such as AI, innovative drugs, machinery, and military industry; the other is sector investments in transportation, discretionary消费, and real estate, driven by improved supply-demand relations. They believe that positive fundamental factors are accumulating, and the trends in AI and the end of domestic deflation will gradually strengthen performance.

Fang Lei, Deputy General Manager and Senior Fund Manager of Xingshi Investment, provides a detailed layered view on AI trends. He sees AI as the “fourth industrial revolution” of “intellectual equality.” From an investment perspective, the most clear-cut is the infrastructure chain for computing power. “Overseas AI infrastructure reacts more strongly, so I prefer some domestic AI infrastructure companies, as their progress is later, and their high points of prosperity are also later, with less current stock price response.”

Bao Xiaohui states that Changli Assets will focus on four core directions: technological innovation, industrial upgrading, domestic demand recovery, and green development. They will select high-quality assets with solid fundamentals, upward industry trends, and strong barriers. “We will prioritize sectors like integrated circuits, aerospace, biomedicine, and low-altitude economy, and have already laid out future industries such as quantum technology, 6G, AI, and brain-computer interfaces. Strengthening the integration of科技, finance, and industry also clarifies the long-term investment direction, which is a key focus for Changli Assets.”

However, under geopolitical conflicts, short-term asset allocation strategies are subtly changing. Jiang Yuting, Head of Snowball Financial Products and Research, notes that global capital markets are showing significant risk-averse features under geopolitical black swan shocks. She advises investors not to panic excessively but to use market volatility to optimize holdings. It is recommended to avoid pure科技成长 stocks in the short term, and increase allocations to dividend assets, energy commodities, and稳健的量化中性策略.

Snowball Private Equity Research Team believes that the impact of geopolitical conflicts on oil prices is often pulse-like rather than trend-based. Central banks will also be more cautious in shifting monetary policies. Moreover, markets have strong self-correcting and pricing abilities. “Private credit and tech stock valuations have already experienced multiple rounds of clearing and squeezing in the past two years of high interest rates, and current turbulence is a process of risk release, not an endpoint.”

However, Fang Lei remains cautiously optimistic about cyclical sectors. He believes this commodity cycle has already begun but “it is difficult to judge which stage it is at.” He warns, “When everyone is very optimistic, it’s better to maintain a contrarian cautious stance, because investing inherently requires contrarian thinking… Betting on ‘this time is different’ in cyclical commodities is very risky.” Regarding gold, he notes that it has already risen significantly, with a steep upward slope, and currently offers average value.