Performance verification becomes the core benchmark for second-quarter investments

Text | Zhang Ju Editor | Lin Weiping

As the first quarter concludes, the investment logic of the A-share market in the second quarter is entering a critical shift, with performance verification expected to become the key theme of this stage. After the Qingming holiday, consensus among institutions is expected to become clearer: the market will shift from thematic speculation at the beginning of the year to fundamentals realization, with companies’ true profitability and order fulfillment becoming the main basis for capital allocation.

Looking at the historical performance of A-shares, during the performance vacuum period from January to March, funds often rely on expectations to engage in thematic battles. After the intensive disclosure window of financial reports begins in April, the market will quickly shift from “speculating on expectations” to “looking at reality.” The rise of blue-chip stocks in 2017, the explosion of the new energy sector in 2021, and the market pattern of high dividends and technology coexistence in 2023—all completed style reshaping in April.

In 2026, the market will emphasize “distinguishing truth from falsehood,” with the dual verification of annual reports and first-quarter reports becoming the key to identifying the quality of enterprises. This stage is also called the “April Decision” of A-shares.

This week, leading companies in sectors such as BeiGene, Hengrui Medicine, WuXi AppTec, and Baili Tianheng, due to impressive annual report performances, saw their stock prices rise to varying degrees. For example, BeiGene achieved its first annual profit, WuXi AppTec’s net profit doubled year-on-year, and Hengrui Medicine’s revenue from innovative drugs accounted for more than half.

The performance realization of innovative drugs is just a microcosm of the validation results in the new quality productivity track. After multiple rounds of concept speculation, the artificial intelligence industry chain is entering a critical period of “fruitful results,” with the 2025 annual report becoming a litmus test for its development quality. For example, Cambrian, a leading AI company, achieved operating revenue of 6.5B yuan in 2025, up 453.21% year-on-year, with net profit attributable to parent of 2.06B yuan, turning a profit for the first time since listing, becoming a typical example of performance realization in the AI track.

From the overall AI industry chain perspective, AI servers, storage chips, and computing power chips are the most prominent segments. These sectors directly benefit from the exponential demand for computing power driven by the commercialization of large models, showing a strong trend of “rising in quantity and price, with full order books,” with financial performance far exceeding industry averages. Buwei Storage on the STAR Market is a representative example; in 2025, its net profit attributable to parent increased by 429.07% year-on-year, with revenue from emerging AI storage products reaching 1.75B yuan. It is expected that in the first two months of 2026, net profit will increase by 921.77% to 1,086.13% year-on-year, with net profit surpassing last year’s total. Behind this surge is the high industry prosperity driven by AI server storage demand reaching 8 to 12 times that of traditional servers, along with the company’s strategic shift toward high-end products.

Compared to annual reports reflecting last year’s performance, the first-quarter report is the first financial statement of the new year, providing a more authentic reflection of a company’s early-year operations and growth momentum. Stocks that outperform expectations have already gained market recognition. For example, Wanjia De, a Shenzhen-listed company transitioning from generic drugs to innovative drugs, is expected to report a net profit attributable to parent of 165 million yuan in Q1 2026, with non-recurring profit of 164 million yuan, turning from loss to profit with a growth rate of 2,174.55%. Driven by this, its stock price has risen for seven consecutive days, with an increase of 138% year-to-date, surpassing last year’s full-year gain.

While focusing on performance as the main line, the second quarter’s performance verification period also carries certain investment risks, such as high-valuation concept stocks, especially small-cap stocks driven purely by concepts. If their financial results continue to prove false, they face valuation correction risks. Additionally, stocks with underwhelming performance or those at risk of delisting under new delisting rules due to poor performance also require investors to beware of potential price adjustments.

April is not only a period of intensive financial report disclosures but also a time for market style reshaping. Institutions have begun to focus on high-quality targets with confirmed performance. For ordinary investors, only by using performance as a benchmark and carefully discerning the true operational quality of holdings can they reasonably judge a company’s prospects and investment cycle, and grasp certain opportunities amid market differentiation.

(This article was published in the April 4 edition of “Securities Market Weekly.” The mentioned stocks are for illustrative analysis only and do not constitute investment advice.)