The benchmark Shanghai Composite Index rose by 0.12 percent to 2385.42 on Thursday. [Photo / China Daily]

But analysts remain skeptical over optimistic stock market outlook

Despite a stock market rally in China, which boosted share prices almost across the board, there is still some way to go in revaluation that could take prices to even higher levels in 2013, a leading research firm said.

China Center for Market Value Management said in a report that revaluation of A shares will "rebound to a more reasonable level" from those seen currently.

But some analysts remain skeptical about such optimism. They said they have not seen clear signs that major publicly listed enterprises have succeeded in lowering their operating margins to improve efficiency and profitability.

The research firm's report said market value fell to 19.81 trillion yuan ($3.19 trillion) in late November, after it reached 24.27 trillion yuan at the end of 2009, making it the second-highest in the world.

But with investors' confidence boosted by prospects of an economic recovery, and with the new leadership's determination to push forward reform, the stock market started to rebound in December.

The report said: "The A-share market will stabilize and rebound in 2013, with valuation levels returning to a reasonable range. Total market value will rise as blue chips rally from undervaluation." It did not give a specific growth expectation.

The benchmark Shanghai Composite Index rose by 0.12 percent to 2385.42 on Thursday, led by a strong performance in sectors including nonferrous metals, coal, environmental protection, insurance, banking and securities. It has gained for four consecutive days.

It has risen about 22 percent from a four-year low in early December, outperforming Japan's booming Nikkei index in the same period.

Combined turnover on China's two bourses in Shanghai and Shenzhen shrank, totaling 212.5 billion yuan, down from 229.9 billion yuan on Wednesday.

However, some analysts and investors are still too shell-shocked from the prolonged slump in the past two years to jump onto the bandwagon. Their reluctance is reflected in a jittery market performance in the past few weeks despite increased turnover.

Don't miss

Chinese stocks close mixed on property control speculation

Stocks remain in bullish mood

Mainland stocks hit record high in past 8 months

How long will the stock rally last?