On March 25, amid recent global instability and market fluctuations, Zhang Yidong, Executive Committee Member, Chief Economist, and Head of Research at Haitong International, shared an in-depth analysis on the theme "Global Order Restructuring: Risks and Opportunities, China's Core Assets Remain in Long-Term Bull Market."

Zhang Yidong expressed strong optimism toward Hong Kong stocks, similar to his outlook for A-shares. He believes that following recent geopolitical tensions, Chinese assets will gain more attractive allocation value. The volatility seen in A-shares and Hong Kong stocks since the beginning of the year, he noted, is largely due to external factors and does not disrupt the long-term upward trend of China's capital markets. This period of adjustment can be viewed as "gathering momentum for a leap"—crouching low now to jump higher later. Both A-shares and Hong Kong stocks are expected to reach new annual highs in the second half of the year.

Regarding the Hang Seng Tech Index, Zhang pointed out that its composition has not yet adapted to China's economic transformation and technological advancements. Despite numerous hard-tech and high-tech companies listing in Hong Kong over the past year, they have not been adequately weighted in the index. He humorously referred to the current Hang Seng Tech Index as the "Hang Seng Traditional Internet Consumption Index," suggesting investors treat it more as a consumer sector play rather than overemphasizing its tech label.

Zhang emphasized the importance of looking beyond just the Hang Seng Tech Index. He introduced the SMART framework to outline three key investment themes in China's core assets:

The first theme: S—Security Assets. This includes energy, strategic resources, and gold. The strategic importance of energy is rising systematically, with China's energy self-sufficiency rate at 85%, significantly higher than that of Japan, South Korea, and Europe, giving it a clear advantage.

The second theme: MA—Manufacturing Abroad. China's most competitive manufacturing sectors, which have thrived domestically, are now expanding overseas with strong competitive edges. These include engineering machinery, power equipment, home appliances, auto parts, chemicals, petrochemicals, and medical devices. Previously undervalued due to domestic economic challenges, these sectors now benefit from stabilized domestic demand and expanding overseas markets, leading to a double boost in valuation.

The third theme: RT—R&D-Driven Technology. This covers national strategic areas such as artificial intelligence and quantum computing, as well as strategic emerging industries like high-end equipment, new materials, new energy, robotics, innovative pharmaceuticals, and aerospace. It also includes future industries such as quantum technology, hydrogen energy, controlled nuclear fusion, brain-computer interfaces, bio-manufacturing, embodied intelligence, and specialized, sophisticated SMEs known as "little giants."

In summary, Zhang Yidong concluded that both A-shares and Hong Kong stocks, given China's low correlation with overseas and Western markets, face limited downside risks, with any setbacks likely being temporary mispricing. However, the upward potential of broad indices may be moderated, as they do not fully reflect China's ongoing economic and technological transformation. The real focus should be on the three SMART themes: Security Assets, Manufacturing Abroad, and R&D-Driven Technology.