Shang Hai Zheng Quan Bao·2026-02-08 17:31Core Viewpoint - The Hong Kong stock market is experiencing a correction, while southbound funds are actively buying, indicating a potential undervaluation recovery opportunity in the market [1][2]. Group 1: Market Performance - The Hang Seng Index fell by 4.55% and the Hang Seng Tech Index dropped by 9.39% from January 29 to February 6, 2026, while southbound funds saw a net inflow during this period [2]. - From February 4 to February 6, southbound funds net bought 532.09 billion HKD, with daily net purchases exceeding 100 billion HKD for three consecutive days [2]. - Notably, on February 5, the net purchase reached 249.77 billion HKD, marking the first time since August 15, 2025, that a single-day purchase exceeded 200 billion HKD [2]. Group 2: Investment Strategies - Southbound funds are focusing on "technology + dividends" as their bottom-fishing strategy, with significant investments in Tencent Holdings and Xiaomi Group, net buying 128.84 billion HKD and 121.32 billion HKD respectively [2][3]. - Other companies like China Life, China Construction Bank, Pop Mart, and Kuaishou also received net purchases exceeding 50 billion HKD [2]. Group 3: Valuation Insights - As of February 5, the price-to-earnings (PE) ratio of the Hang Seng Index was only 12 times, while the Hang Seng Tech Index was at 25 times, both at historical low percentiles [3]. - Sectors such as consumer goods, healthcare, telecommunications, and utilities have seen valuations drop below their average since 2015, presenting long-term investment appeal [3]. Group 4: Market Outlook - The recent inflow of southbound funds is expected to boost market sentiment and alleviate liquidity pressure in the offshore market, potentially leading to a rebound in undervalued stocks [4]. - Analysts from various institutions maintain a positive outlook for the Hong Kong stock market, attributing recent adjustments to technical and emotional pressures rather than fundamental changes [4]. - The overall market is characterized by a "moderate recovery in fundamentals, synchronized liquidity improvement, and neutral to warm sentiment," suggesting a favorable investment environment [4].