Core Viewpoint - The Hong Kong stock market has undergone significant changes over the past year, with the Hang Seng Index (HSI) currently valued at 11.4 times earnings, which is above the average since 2015, indicating that it is not considered "cheap" [1] Group 1: Market Valuation and Expectations - The current market valuation is heavily reliant on earnings recovery rather than further expansion of valuation multiples or risk premiums [1] - Under a baseline scenario, if the weighted risk-free rate decreases from 3.4% to 3.1%, and if the technology and internet sectors see a return to their low risk premiums, the valuation upside could be around 5-7% [1] - In an optimistic scenario, if policies stimulate price recovery, there could be over 15% upside in valuations if other sectors also see a drop in risk premiums [1] Group 2: Profit Growth Projections - Under baseline assumptions, the projected profit growth for Hong Kong stocks is 3% for 2026, with non-financial sectors expected to grow by 6-7% and financial sectors projected to have zero growth [2] - The expected index levels for the HSI are between 28,000 to 29,000 points under baseline conditions, with optimistic and pessimistic scenarios projecting 31,000 and 21,000 points respectively [2] Group 3: Investment Strategy Recommendations - The company suggests maintaining a focus on dividend-paying assets to navigate the weak overall credit cycle, indicating a need for continued monetary easing [2] - In a weak credit expansion environment, the company recommends focusing on sectors that can still expand credit, particularly in AI technology, emerging industries, and those linked to U.S. demand [2] - Specific sectors recommended for overweight positions include AI software and hardware, new energy, chemicals, home furnishings, and innovative pharmaceuticals, while underweight positions are suggested for real estate, food retail, and personal household goods [3]
中金：恒指明年“基准”目标28,000至29,000点