Zhong Guo Jing Ji Wang·2025-08-08 07:16Core Viewpoint - The Hong Kong stock market has shown strong growth in 2023, with the Hang Seng Index increasing by 20% as of June 30, driven by the return of overseas capital and increased investment from mainland China [1] Group 1: Market Overview - The Hong Kong market is expected to undergo asset revaluation, particularly benefiting the technology sector, which is considered a core asset [1] - The launch of the FTSE China A50 Technology ETF by Franklin Templeton aims to provide investors with an efficient tool to invest in the Hong Kong technology sector [1] Group 2: Index Composition and Performance - The CSI Hong Kong Stock Connect Technology Index, which the ETF tracks, includes 50 large-cap technology leaders with high R&D investment and revenue growth [1] - As of June 30, 2025, the index's constituents primarily cover emerging technology sectors such as automotive, electronics, media, pharmaceuticals, and computers, accounting for 81.2% of the index [2] Group 3: Financial Performance - The internet and automotive sectors within the Hong Kong stock market have shown a revenue growth rate exceeding 10% year-on-year, indicating strong profitability [2] - The technology sector demonstrates significant long-term growth potential, supported by high R&D investment, which has consistently exceeded 7% of revenue over the past three years [2] Group 4: Valuation and Investment Opportunities - The Hong Kong Stock Connect Technology Index is currently undervalued, with a PE ratio of 21.46, placing it in the 4.98% percentile over the past five years, suggesting substantial room for valuation recovery [3] - The anticipated easing of valuation pressures due to improving global liquidity and expectations of economic recovery in China may accelerate the valuation recovery process for the technology sector [3]