According to recent reports, leading brokerage CITIC Securities has released a research note stating that Hong Kong stocks are demonstrating increasing advantages in the coming period, with both domestic and international capital showing growing interest in the Hong Kong market, entering an overall bullish sentiment.
The research report indicates that the current long-term bull market cycle for Hong Kong stocks was established in the fourth quarter of last year and is now progressing through its middle phase. Currently: 1) The liquidity cycle has reached approximately its midpoint, with an overall accommodative tone expected for the next 1-2 years. 2) Regarding the valuation cycle, Hong Kong stocks experienced relatively low valuations after a three-year bear market, and following more than a year of continuous recovery, valuations have now reached the upper-middle percentile. 3) The earnings cycle is just beginning to recover from the bottom, with primary earnings recovery currently concentrated in structurally favorable sectors.
The report also notes that while overseas liquidity tightening has become one of the major pressures on Hong Kong stocks, U.S. employment data over the past two months has significantly underperformed market expectations, substantially boosting rate cut expectations. Subsequently, Hong Kong stocks' macro liquidity environment is expected to improve rapidly, supporting valuation recovery.
On the capital front, foreign investors continue to upgrade their outlook on the Hong Kong stock market and Chinese assets, with foreign capital expected to maintain sustained inflows. Regarding southbound capital flows, overall inflows are beginning to accelerate. Both domestic and foreign capital are expected to continue flowing into Hong Kong stocks.
Recently, multiple foreign institutions have released their views on the Chinese market, generally showing optimism toward Hong Kong stock market prospects. Goldman Sachs released a research report maintaining an "overweight" stance on Chinese equities. Standard Chartered Bank maintained its "overweight" rating on Chinese stocks in its "Global Market Outlook for the Second Half of 2025." Morgan Stanley's research report indicated that current hot sectors including artificial intelligence, semiconductors, humanoid robots, and new consumption are primarily traded on Hong Kong and A-share markets, with investor interest in the Chinese market reaching unprecedented levels, potentially further catalyzing foreign capital inflows into Hong Kong stocks.
Regarding investment targets, CITIC Securities believes investors should focus on Hong Kong stocks' core growth sectors, particularly internet, innovative pharmaceuticals, new consumption, and technology sectors, whose price-to-earnings ratios have already broken through historical highs. Valuation recovery in favorable sectors is expected to continue driving overall Hong Kong stock valuation increases. Dividend defensive allocation sectors are also worth attention.
Consumer Electronics Sector: XIAOMI-W (01810), LENOVO GROUP (00992), AAC Technologies (02018), SMIC (00981), Advanced Semiconductor Engineering (01415), among others.
Information Technology Services Sector: WPG Holdings (00856), Kingdee International (00268), 9F Inc. (09636), among others.
AI and Robotics: 4Paradigm (06682), SenseTime-W (00020), UBTECH Robotics (09880)
New Energy Vehicles: BYD Company (01211), Leapmotor (09863)