【Latest Hong Kong Stock Analysis】East rising and falling? Hidden Opportunities for Chasing Back Blocks

The Hang Seng Index hit another 52-week high today as major trading volumes remained active. The positive outlook for Hong Kong stocks has remained so far, but a new topic would like to be discussed today is that the market has been arguing for a larger “East and West Down”. In addition, even with the Hang Seng index high, there are signs that funds are moving to catch up with the back blocks. Let's talk about these two topics today.

Writers have long disapproved of the notion of “East rising and falling”, but judging by the performance of the past three trading days, this statement is becoming controversial again. We'll take a closer look at why today.

US Dollar Debt Declines

It is understandable that the short-term “East-West decline” has occurred occasionally over the past three years, and the reason is often related to the narrowing of the spread in interest rates. When markets are willing to take a better look at the outlook for the Chinese economy and US equities are under pressure from high interest rate valuations during the adjustment period, there are often trends and ideas of 'East bearish'. But so far the US is only dealing with CPI pressure in January and Trump's trade policy rhetoric, if it is simply a question of valuation, as long as US stocks adjust slightly, supported by strong macroeconomic data or factors (e.g. employment data, retail data, technology developments), the entire stock market High valuation levels (average 1~2 SD or more) are maintained, so there has often been only a brief “East-West Decline” in the past.

In the author's personal judgment as a whole, strictly speaking, as the Sino-American relationship has continued to deteriorate from 2018 to the present, individuals believe that in the long run the interconnectedness of Chinese stocks will be less and less relevant, given the outlook and asset allocation at the beginning of last year, individuals consider appropriate diversification investments to be very important.

In addition, it is worth noting that the expectation of interest rate cuts is gradually increasing as US stocks adjust recently, which undoubtedly benefits the overall performance of Hong Kong stocks. At the same time, whether US stocks can recover in the face of the expected increase in interest rates has also been the focus of investment in the markets recently. Of course, short-term focus is on bullish Hong Kong stocks, but it is also not advisable to take too lightly on US stocks, such as the recent sharp falls. $Tempus AI(TEM.US)$ And don't forget that stock prices have rallied nearly twice in the past single month and are now only within 0.618 of the gains. Given the high risk involved in these stocks, relying solely on the anti-erosion function is not necessarily successful. Diversified investment is the most effective method.

As for the behavior of the US Stock Exchange rebound, we will use technical analysis for the time being to judge: $S&P 500 Index(.SPX.US)$ For example, refer to KDJ, an indicator that is more sensitive to the market in the short term. This is the core logic of dynamic trading in technical analysis teaching.

The concept behind the different segments of Hong Kong stocks

The surge in Hong Kong stocks was driven by technology stocks and is undisputed. At 1500pm on 26 February, $Hang Seng Index(800000.HK)$ An increase of 19% year-to-date, $Hang Seng TECH Index(800700.HK)$ An increase of 34%.

However, from the late February round of funds, there are clear signs of a tailspin, even though tech stocks have been lagging behind. $MEITUAN-W(03690.HK)$ und $JD-SW(09618.HK)$ THERE WAS ALSO A SIGNIFICANT OUTPOURING OF FUNDS TODAY, REFLECTING THAT HONG KONG STOCKS AS A WHOLE ARE STILL AT RISK ON STAGE.

In addition to the expectation of a drop in the US debt rate, the latest hype is to keep an eye on two expectations for next month. It has been mentioned many times in past articles that the emergence of DeepSeek has only led the market to reassess China's view of technology, while revaluation is an investment concept for the entire stock market. As market confidence gradually increases, valuations are naturally conditioned to rise and firm above average levels.

In addition, as financial markets show signs of improvement, we have recently seen a large number of companies successfully finance, and improved financing channels in emerging industries (not just technology) will be more conducive to business expansion, thus driving economic and employment growth. The current investment logic is more solid than last year's public holiday hype. It is no longer simply an expectation that policies will support the economy, but rather from the core values of the enterprise, which will increase valuations in the context of a stable profit outlook. As the investment talk of the past two weeks said, we are aiming for a standard spread of more than 1 standard spread above the benchmark 10-year average for the Hang Seng market earnings.

While this benchmark target is not far away so far, strong stocks are still conditioned to hold. Investors can also use the “hype not market” mindset to pursue the following concept as a short-line target. Today we're going to simply discuss some of the most popular post-chase blocks recently.

Consumer Stocks

Valuations across the consumer segment are likely to increase as the environment improves, and there is room for appreciation of both essential and non-essential goods. In investment advice, it is recommended to look for brands with high recognition and stable cash flow; non-essential brands are of course equally important, while keeping an eye on their operating data, inventory pressure, gross margins or new brand expansion.

For example, in conjunction with technical analysis, $ANTA SPORTS(02020.HK)$ As an example. macd has given a buy signal and the share price has also formed a good medium-short uptrend. The company is expected to gradually recover losses from the issuance of CB last year.

$HAIDILAO(06862.HK)$ $MENGNIU DAIRY(02319.HK)$ $NONGFU SPRING(09633.HK)$ $MNSO(09896.HK)$

Real Estate Stocks

Home equity has always been seen as the highest beta segment and will always benefit as the market atmosphere improves. Today $BEKE-W(02423.HK)$ 、 $LONGFOR GROUP(00960.HK)$ 、 $YUEXIU PROPERTY(00123.HK)$ 、 $CHINA OVERSEAS(00688.HK)$ und $CHINA RES LAND(01109.HK)$ There is also the pursuit of funds and technological breakthroughs. When it comes to investing in home equity, it is necessary to control risk with a bet, after all, they are the highest beta stocks, but as long as companies do not have obvious financial problems, they may be able to repair valuations more quickly as the environment improves.

The main consideration in this section is risk, and pay attention to the hidden concerns of high risk and high returns.

Domestic Insurance and Mainland Securities Stocks

This wave surges A-shares $SSE Composite Index(000001.SH)$ All have been relatively lagging, mainly due to fewer AI-related stocks, which are mainly focused on technology stocks in Hong Kong. In fact, A stocks are also hot and hot related to the concept of AI, such as the stocks that have recently been learned from learning about domestic GPUs $Cambricon(688256.SH)$ 。 To make a point, trading in A-shares also showed signs of slowly improving in February, and there are no signs that A-shares are lagging behind in the short term, with both improving investment sentiment and expectations. Today, Chinese securities stocks have been borrowed. In the short term, you can take a look at the performance of both domestic insurance and Mainland securities stocks.

$PING AN(02318.HK)$ $CHINA LIFE(02628.HK)$ $CPIC(02601.HK)$ $NCI(01336.HK)$ $CHINA TAIPING(00966.HK)$ $CITIC SEC(06030.HK)$ $CGS(06881.HK)$ $CICC(03908.HK)$ $CMSC(06099.HK)$ $HTSC(06886.HK)$

Finally, prompt again. The following are relevant sectors and stocks that past writers have mentioned in investment talks or articles that can focus on this round of upswings and believe to be among the beneficiaries of an optimistic outlook for the economic outlook.

Analysis of the key points of attention for Hong Kong stocks

The following are relevant sectors and stocks to watch for this round of upswings, which we believe are among the beneficiaries when the economic outlook turns optimistic.

• Big Tech Stocks

  $TENCENT(00700.HK)$ $BABA-W(09988.HK)$ $XIAOMI-W(01810.HK)$ $MEITUAN-W(03690.HK)$ $BIDU-SW(09888.HK)$ $JD-SW(09618.HK)$ $NTES-S(09999.HK)$ $SMIC(00981.HK)$ $TRIP.COM-S(09961.HK)$

• Automotive Stocks

  $KINGSOFT CLOUD(03896.HK)$ $GDS-SW(09698.HK)$ $LENOVO GROUP(00992.HK)$ $KINGDEE INT'L(00268.HK)$

• Cloud Services Shares

  $KINGSOFT CLOUD(03896.HK)$ $GDS-SW(09698.HK)$ $LENOVO GROUP(00992.HK)$ $KINGDEE INT'L(00268.HK)$

• Equipment-related stocks

   $SUNNY OPTICAL(02382.HK)$ $AAC TECH(02018.HK)$ $BYD ELECTRONIC(00285.HK)$ $FIT HON TENG(06088.HK)$

• Optics Energy Shares

  $XINYI SOLAR(00968.HK)$ $FLAT GLASS(06865.HK)$ $XINTE ENERGY(01799.HK)$

• Non-essential consumer stocks

  $POP MART(09992.HK)$ $ANTA SPORTS(02020.HK)$ $HAIDILAO(06862.HK)$ $MNSO(09896.HK)$

• Required Consumer Stocks

  $NONGFU SPRING(09633.HK)$ $MENGNIU DAIRY(02319.HK)$

• Inner silver

  $CCB(00939.HK)$ $ICBC(01398.HK)$ $BANK OF CHINA(03988.HK)$ $ABC(01288.HK)$ $BANKCOMM(03328.HK)$ $CM BANK(03968.HK)$

• Internal insurance

  $CPIC(02601.HK)$ $PING AN(02318.HK)$ $CHINA LIFE(02628.HK)$ $PICC P&C(02328.HK)$ $NCI(01336.HK)$

• TELECOMMUNICATIONS

  $CHINA MOBILE(00941.HK)$ $CHINA UNICOM(00762.HK)$ $CHINA TELECOM(00728.HK)$

• Author Information

  Chief Analyst of Futu Securities Liang

  (The author is a licensee of the Securities and Exchange Commission and its affiliates do not have any financial interest in the Proposed Share Issuer)