Xin Lang Cai Jing·2025-03-31 03:51Core Viewpoint - The Hong Kong stock market is experiencing a pullback, particularly in technology stocks, despite a recent influx of capital into the Hang Seng Technology ETF, indicating ongoing investor optimism [1][3]. Group 1: Market Performance - The Hang Seng Technology ETF (513260) saw a decline of 2.01% with a trading volume exceeding 500 million HKD, reflecting a premium rate of 0.34% [1]. - Over the past five days, the net inflow into the Hang Seng Technology ETF has surpassed 450 million HKD [1]. - Margin financing for the Hang Seng Technology ETF has reached a new high of over 120 million HKD [3]. Group 2: Sector Performance - Most component stocks of the Hang Seng Technology ETF have experienced a pullback, with notable declines in Xiaomi, Alibaba, Tencent, and Meituan, while Midea Group and Haier Smart Home saw gains post-earnings announcements [5]. - Midea Group reported a net profit of 38.539 billion HKD for 2024, a year-on-year increase of 14.3%, with revenue of 409.1 billion HKD, up 9.5% [5]. - Haier Smart Home achieved a revenue of 285.981 billion HKD for the fiscal year 2024, a 4.29% increase, with a net profit of 18.74 billion HKD, up 12.92% [5]. Group 3: Capital Flows - Southbound capital has continued to flow into the market, with a net purchase exceeding 2.2 billion HKD on the day, and a cumulative net inflow of over 435.7 billion HKD year-to-date, six times that of the same period last year [5]. - The focus of southbound capital is primarily on technology assets, with Xiaomi, Meituan, Alibaba, and Li Auto being the top targets in the past week [7]. Group 4: Earnings and Valuation - The recent earnings season has led to upward revisions in index earnings, particularly for the Hang Seng Technology index, which is viewed positively for the market [9]. - Major companies like Tencent, Xiaomi, and Meituan are expected to contribute significantly to the earnings growth of the Hang Seng Technology index, accounting for 60% of the earnings increment [9]. - The valuation of Chinese technology stocks is considered reasonable compared to U.S. tech stocks and other emerging markets, with a focus on changes in risk premiums driven by capital flows [11]. Group 5: Future Outlook - The market is expected to maintain upward momentum, with the Hang Seng Index potentially reaching 26,000 if risk premiums for technology stocks decrease to early 2021 levels [13]. - The market has shown signs of stabilization and a clear focus on technology as the main investment theme, contrasting with the lack of direction seen from 2021 to 2023 [13].