Historical data indicates that the Hang Seng Index has an 82% probability of rising in the three trading days preceding the Lunar New Year, while post-holiday performance shows no clear calendar effect, with gains occurring only 40% to 60% of the time. The typical window between the Spring Festival and the Two Sessions does not inherently favor Hong Kong equities. However, the current cycle may diverge from this pattern as the pricing dynamics of Hong Kong stocks have been evolving in recent years. Correlation with A-shares has strengthened, while linkage to U.S. equities has weakened. This suggests that against a backdrop of significantly improved risk appetite in the mainland market, Hong Kong stocks could potentially experience passive follow-on gains, as might be observed after the Spring Festival in 2024 and 2025. How should recent headwinds for Hong Kong stocks be assessed? Firstly, the adjustment for telecom operators involves a reclassification of tax items rather than a tax increase, essentially reflecting technological progress and shifts in business structures within tax policy. Current policy optimizations focus more on phasing out outdated tax incentives established during earlier technological phases, such as through dynamic reviews and updated criteria for high-tech enterprise qualifications, aiming to direct fiscal support precisely to firms at the technological forefront. Secondly, although the strengthening of the renminbi against the Hong Kong dollar does not directly impact Hong Kong stock trends, exchange rate losses indeed worsen the investment experience for holders; however, the renminbi lacks a foundation for sustained, substantial one-way appreciation. Thirdly, market concerns have emerged regarding sectors where foreign investors hold pricing power due to potential U.S. policy shifts, but it is important to note that if overseas liquidity recovers beyond expectations, these same sectors could see significant net capital inflows. Sectors with foreign pricing influence include internet, hardware equipment, software services, home appliances, and media. Domestically-oriented sectors with Chinese investor pricing power include telecommunications, oil and petrochemicals, coal, semiconductors, and banks. Fourthly, massive IPOs in Hong Kong have limited immediate market impact, with the primary effect arising from the lock-up expiration peak approximately six months after listing. Historical instances, such as mid-2011, late 2015, March 2019, Q2 2021, and mid-2022, show that sell-offs often coincide with these expiration waves. A significant lock-up expiration is anticipated in March 2026, primarily involving non-ferrous metals and beverage companies, with the scale for mid-to-large cap firms reaching HKD 87.2 billion, exceeding the minor peak at the end of the previous year. Since southbound investors cannot participate in IPOs to benefit from listings of scarce companies but must bear the risks from lock-up expirations, this remains a key concern for 2026. Outlook: Opportunities for strategic positioning are emerging as market sentiment digests these factors, with attention on the potential inflection point following the post-holiday lock-up expiration peak. Accumulating positions during sentiment troughs is advised, focusing on: technology leaders benefiting from AI industry trends, such as internet companies; high-dividend stocks with digested valuations and solid fundamentals; and quality companies likely to rebound after lock-up pressure eases. For instance, shares like those of CATL experienced significant pre-emptive declines ahead of their late November 2025 lock-up expiration due to liquidity concerns, with risks priced in early; once the expiration passed, the elimination of this overhang often led to a rapid bottoming and recovery in share prices.