A-Share Market Opens Lower and Closes Lower; ChiNext Index Plunges 7.35%

China's three major A-share indices collectively opened lower on February 28 (Tuesday), with the market maintaining a downward trajectory throughout the session. Declines gradually widened, although individual stocks were roughly split between gainers and losers.

The Shanghai Composite Index fell 1.16%, closing at 3,813.31 points. The Shenzhen Component Index dropped 4.52% to 13,509.68 points, while the ChiNext Index plunged 7.35% to 3,327.03 points.

Total trading volume on the Shanghai and Shenzhen markets reached RMB 2.0258 trillion, down RMB 50.8 billion from the previous trading day.

CITIC Construction Investment stated that the A-share market is positioned for long-term success. It noted that China's A-share market remains on a long-term upward trend, with solid overall market capitalization and broad investment opportunities. While acknowledging isolated stock bubbles, the firm emphasized that the market as a whole faces no systemic risks, with clear industrial progress and earnings growth.

The firm pointed out that the U.S. stock market carries extremely high systemic bubble risks. Despite its technological and monetary advantages, the U.S. market faces non-negligible systemic risks due to industrial hollowing and price inflation.

CITIC Construction Investment identified eight key advantages of A-shares compared to U.S. equities:

First, differences in total market capitalization provide a margin of safety advantage.

Second, differences in leverage scale offer a liquidity condition advantage.

Third, differences in monetary credit confer a sovereign credit advantage.

Fourth, differences in AI development models provide an advantage in AI prospects.

Fifth, differences in industrial renewal pace offer a speed-to-innovation advantage.

Sixth, differences in supply chain quality provide a supply chain advantage.

Seventh, differences in industrial performance offer a growth performance advantage.

Eighth, differences in future potential provide a revaluation potential advantage.