Core Viewpoint - The Hong Kong stock market has shown strong upward momentum in the first half of 2025, with the Hang Seng Index reaching a high of 24,874 points, marking a maximum increase of over 24% from the beginning of the year [1] Group 1: Market Performance - The Hang Seng Index started at around 19,932 points and experienced a significant recovery after a brief dip to 19,260 points due to tariff policy impacts, ultimately achieving a cumulative increase of 19.11% by June 13, 2025 [1] - The Hang Seng Index ranks second among major global stock indices, only behind the South Korean Composite Index [1] Group 2: Southbound Capital Inflow - Southbound capital has become the core driving force behind the rise of the Hong Kong stock market, with a cumulative net purchase of 674.2 billion HKD by June 10, 2025, accounting for 83% of the total net purchases for the entire year of 2024 [3] - This inflow has reached a historical high, significantly exceeding levels seen in previous years [3] - The capital allocation shows a "dumbbell" characteristic, focusing on high-dividend assets on one end and technology growth and discretionary consumption sectors on the other [3] Group 3: Key Stocks and Sector Performance - Tencent Holdings is the largest stock held by southbound capital, with a market value of 531.986 billion HKD, while China Mobile, China Construction Bank, and Xiaomi Group also have holdings exceeding 200 billion HKD [3] - Major state-owned banks have seen substantial increases in holdings, with China Bank, Construction Bank, Industrial and Commercial Bank, and Agricultural Bank being significantly increased by 55.69 million shares, 40.58 million shares, 33.85 million shares, and 23 million shares respectively [3] Group 4: Structural Market Trends - The Hong Kong market exhibits clear structural characteristics, with the pharmaceutical and new consumption sectors emerging as two important investment themes [4] - In the pharmaceutical sector, Health Road has seen a cumulative increase of over 320%, becoming the top-performing stock among Hong Kong Stock Connect targets [4] - New consumption stocks like Lao Pu Gold, Pop Mart, and Gu Ming have also shown impressive gains of 296%, 205%, and 167% respectively, driving the related sectors upward [4] Group 5: Technology Sector Outlook - Despite facing short-term adjustments, the long-term outlook for the technology sector remains positive, with strong investment value in artificial intelligence, semiconductors, and leading internet companies [4] - The Hong Kong Internet ETF has seen a net inflow of 688 million HKD since the second quarter, surpassing a total scale of 5 billion HKD, indicating ongoing investor interest in the technology sector [4]