On September 24, 2024, A-shares were ignited by a policy announcement at a point of extreme pessimism; two years later, total market capitalization exceeds 120 trillion yuan, and the average daily turnover per stock has nearly doubled. Behind a sufficiently "lively" bull market, however, the actual experience of investors' accounts is far less impressive than the data suggests. Low-priced stocks and high-priced stocks are celebrating together, and under this "barbell" market pattern, the margin for error is quietly narrowing. This two-year retrospective neither cheers nor jeers—it simply aims to see this round of market action clearly once more. Has stock market performance become "decoupled" from fundamentals? Note: The previous market cycle spanned from January 1, 2019 to February 10, 2021, while the current cycle runs from September 24, 2024 to September 30, 2026. All data is sourced from Wind.

During the previous cycle, the number of A-share listed companies surged from 3,338 to 4,028, a jump of 20.67%, with 690 IPOs during the period. In the current cycle, the number of A-share listed companies grew from 5,298 to 5,572, an increase of 5.17%, with 274 IPOs—a 60.29% decline in new listing pace compared to the prior cycle. The markedly slower rhythm clearly reflects an effort to control supply-side pressure and protect market liquidity. Data source: Wind, as of September 30, 2026.

From a valuation perspective, the average price-to-earnings ratio (PE-TTM) at the end of the previous cycle was -64.01 times (loss-making companies dragged down the overall average), while in the current cycle it fell from 37.94 times to 20.41 times. This phenomenon also demonstrates that the arithmetic average P/E ratio across the entire market is easily distorted by loss-making samples and carries a strong "deceptive" quality. Therefore, when selecting stocks, investors may want to pay more attention to other valuation metrics such as the price-to-book ratio (PB). In the previous cycle, PB jumped from 1.34 times to 3.94 times, a surge of 194.03%, indicating that the market at the time placed extreme emphasis on growth and was willing to pay very high premiums, suggesting a potentially serious degree of bubble formation. In the current cycle, valuation sentiment has been more restrained, rising only from 2.49 times to 5.10 times, a gain of 104.82%.

The number of loss-making stocks in the previous cycle rose from 329 to 678, a net increase of 349. In the current cycle, it rose from 1,286 to 1,636, a net increase of 350, indicating that overall earnings quality is on a declining trajectory, and market rallies will not automatically repair corporate fundamentals. In the previous cycle, A-share total market capitalization soared from 46.27 trillion yuan to 88.28 trillion yuan, nearly doubling—a broad-based "wealth creation rally." In the current cycle, total A-share market capitalization rose from 77.70 trillion yuan to 121.85 trillion yuan, achieving 56.82% market cap growth on the basis of only a 5.17% increase in the number of stocks.

Looking at the top 100 stocks by market cap increase and decrease, the market style (hot sectors) has shifted noticeably between the two cycles—from "growth and consumption" to "finance and technology." This shows that there are no permanent "core assets," only assets that align with the prevailing macroeconomic environment and industrial trends. In the previous cycle, the top five stocks by market cap increase were Kweichow Moutai Co.,Ltd. (600519.SH) at 2,526.201 billion yuan, Wuliangye Yibin Co.,Ltd. (000858.SZ) at 1,132.537 billion yuan, CATL (300750.SZ) at 799.288 billion yuan, China Merchants Bank Co.,Ltd. (600036.SH) at 736.166 billion yuan, and China Tourism Group Duty Free Corporation Limited (601888.SH) at 639.748 billion yuan. In the previous cycle, the top five stocks by market cap decrease were Petrochina Company Limited (601857.SH) at -534.839 billion yuan, Bank Of China Limited (601988.SH) at -147.913 billion yuan, Agricultural Bank Of China Limited (601288.SH) at -145.139 billion yuan, China Petroleum&Chemical Corporation (600028.SH) at -127.887 billion yuan, and China Construction Bank Corporation (601939.SH) at -127.084 billion yuan.

In the current cycle, the top five stocks by market cap increase were China Construction Bank Corporation at 896.370 billion yuan, Zhongji Innolight Co.,Ltd. (300308.SZ) at 821.776 billion yuan, Industrial And Commercial Bank Of China Limited (601398.SH) at 819.793 billion yuan, Agricultural Bank Of China Limited at 760.550 billion yuan, and Foxconn Industrial Internet Co.,Ltd. (601138.SH) at 746.045 billion yuan. In the current cycle, the top five stocks by market cap decrease were Wuliangye Yibin Co.,Ltd. at -195.245 billion yuan, China Petroleum&Chemical Corporation at -160.867 billion yuan, Kweichow Moutai Co.,Ltd. at -150.879 billion yuan, Shenzhen Mindray Bio-Medical Electronics Co.,Ltd. (300760.SZ) at -87.048 billion yuan, and Great Wall Motor Company Limited (601633.SH) at -76.444 billion yuan. Data source: Wind, as of September 30, 2026, excluding stocks that listed after the cycle start date.

A more comprehensive dataset is the market cap shifts and market cap proportion structural changes of constituent stocks across the 31 Shenwan Level-1 industry indices during both cycles. As shown in the chart, in the current cycle, the electronics sector stands head and shoulders above the rest with a net market cap increase of 16.07 trillion yuan, while the banking sector's proportion rose from 2.27% in the previous cycle to 10.32% in the current one. This indicates that during index consolidation or correction, banks, as high-dividend heavyweights, played a role in stabilizing the market's center of gravity. In contrast, the previous cycle's market cap gainers and decliners were relatively dispersed, and the top market cap gainer—food and beverage—became a concentrated "market cap shredder" in the current cycle. Data source: Wind, as of September 30, 2026.

Are margin traders cashing out at highs and exiting?

The above information is more intuitive when reflected in stock price changes. In the previous cycle, the average stock price soared from 11.76 yuan to 24.41 yuan, a gain of 107.57%. In the current cycle, the average stock price rose from 14.91 yuan to 27.49 yuan, a gain of 84.37%. The average price gains in both cycles are similar, but considering that the starting price base in the current cycle is higher than the previous one, the actual absolute increase (approximately 12.58 yuan) is comparable to the previous cycle (approximately 12.65 yuan). This indicates that the "wealth effect" of the current rally has not surpassed the previous one in absolute terms, and when factoring in inflation and time costs, the actual experience may be even less impressive than the previous cycle.

This can be corroborated by two metrics: the maximum gain from the interval low and the maximum decline from the interval high. The previous cycle's rebound from the low reached 215.50%, while the current cycle's was 150.95%. In stark contrast, the current cycle's drawdown from the high was -50.73%, deeper than the previous cycle's -47.39%. Therefore, the current cycle exhibits more pronounced "roller coaster" characteristics, with correspondingly higher average volatility. Data source: Wind, as of September 30, 2026.

Now looking at the gainers and losers lists: in the previous cycle, the top five gainers were Beijing Wantai Biological Pharmacy Enterprise Co.,Ltd. (603392.SH) at 2,578.81%, Intco Medical Technology Co.,Ltd. (300677.SZ) at 2,334.23%, Maxscend Microelectronics Company Limited (300782.SZ) at 2,204.12%, Guangdong Kinlong Hardware Products Co.,Ltd. (002791.SZ) at 1,927.68%, and Shanghai Bairun Investment Holding Group Co.,Ltd. (002568.SZ) at 1,467.55%. The top five decliners were Shenzhen Pengfei Green Energy Development Co.,Ltd. (002356.SZ) at -85.73%, Guangdong Hongteo Technology Co.,Ltd. (300176.SZ) at -83.34%, Henan Senyuan Electric Co.,Ltd. (002358.SZ) at -81.61%, Zhejiang Yatai Pharmaceutical Co.,Ltd. (002370.SZ) at -80.43%, and Shenwu Energy Saving Co.,Ltd. (000820.SZ) at -79.96%.

In the current cycle, the top five gainers were Yuanjie Semiconductor Technology Co.,Ltd. (688498.SH) at 2,602.25%, Swancor Advanced Materials Co.,Ltd. (688585.SH) at 2,416.71%, Guangdong Dtech Technology Co.,Ltd. (301377.SZ) at 2,197.11%, Grace Fabric Technology Co.,Ltd. (603256.SH) at 1,902.27%, and Henan Shijia Photons Technology Co.,Ltd. (688313.SH) at 1,747.90%. The top five decliners were Anhui Strong State New Materials Co.,Ltd. (001279.SZ) at -85.27%, Dongguan Changlian New Material Technology Co., Ltd. (301618.SZ) at -84.47%, Cnsig Anhui Hongsifang Fertilizer Co.,Ltd. (603395.SH) at -79.74%, Dapeng Industrial (920091.BJ) at -76.56%, and Jiachen Intelligent (920096.BJ) at -73.20%. Data source: Wind, as of September 30, 2026, excluding ST stocks.

Notably, the average daily turnover per stock in the current cycle reached 387 million yuan, a surge of 98.46% compared to the previous cycle. However, the interval net margin purchase shifted from a net buy of 671.081 billion yuan (adding leverage) in the previous cycle to a net sell of 1,190.448 billion yuan (deleveraging) in the current one, with the average margin financing and securities lending balance per stock declining from 572 million yuan to 557 million yuan. The contrast of significantly elevated turnover alongside an overall net exit of margin positions in this cycle is most likely due to leveraged funds locking in gains at highs and withdrawing from some high-beta technology sectors, thereby reducing the pulling power of leveraged capital on the market. Meanwhile, the rising share of short-term speculative trading has intensified the market's emotional characteristics.

Emotion-driven pricing creates a "barbell" market

Yet, looking at the performance of 25 Wind style indices during the current cycle, they present a picture of "universal gains." However, by delving deeper into the "internal structural differences" in style index performance between the two cycles, the profiles of each cycle gradually become clear. First, from a market cap style perspective, large-cap stocks held a clear advantage in the previous cycle, with traditional core assets rising broadly. The large-cap index rose 163.76%, the mid-cap index rose 125.45%, while indices representing small-cap style performed relatively poorly—the small-cap style index gained only 0.79%, and the small market cap index rose 30.50%. Capital was highly concentrated in large and mid-cap leaders. The current cycle is the exact opposite, displaying a clear "small-cap counterattack" trend. The small-cap style index rose 111.08%, the small market cap index rose 107.23%, the large-cap index rose 40.98%, and the mid-cap index rose 55.55%. Capital is highly concentrated in niche leaders with micro and small market caps. Data source: Wind, as of September 30, 2026.

In the current cycle, the Wind low-priced stock index surged 111.73%, while the Wind high-priced stock index rose 111.40%—the two are nearly identical in gains, presenting a "barbell" phenomenon. The constraint of corporate fundamentals (profitability or lack thereof) on stock prices is weak, and margin traders are more inclined to sell high-valuation sector stocks that have already seen massive gains. In the previous cycle, the Wind low-priced stock index fell 79.98%, the Wind low-profit style index declined 5.42%, and the Wind low-valuation index edged up just 1.99%, ranking at the bottom. This shows that the market was more willing to pay higher premiums for stocks with high earnings certainty.

Such changes often bring greater risks. In a market where "loss-making stocks outperform blue chips" and "small caps outperform large caps," once market liquidity tightens or regulators crack down on excessive speculation, these low-priced, loss-making stocks that have posted massive gains will face a brutal stampede-style selloff. In fact, this has already occurred—the current cycle's average maximum decline from the interval high exceeding -50% and surpassing the previous cycle is a clear signal.

In A-share history, collective strength in low-priced stocks has been viewed by some market observers as a signal that a bull market is entering its final phase (this is merely a summary of market experience, not an absolute rule). However, in a market where "emotion-driven pricing" plays an overly dominant role, the margin for error tends to decline repeatedly. When stock prices are no longer supported by earnings, every pullback lacks the confidence of buying support. Once the wealth effect fades, capital will recede like a tide, and an emotion-driven bull market will ultimately return to an earnings-driven one. For ordinary investors, rather than chasing the ultra-high elasticity of the "barbell" pattern, it is better to hold fast to the unchanging "earnings certainty" amid the noise—because fundamentals are what provide a clearer margin for error.