Changjiang Securities·2025-06-29 06:29Group 1: AH Premium Rate Overview - The AH premium index reached a five-year low on June 11, 2025, down over 10% compared to the end of 2024[4] - The AH premium rate measures the price difference between A-shares and H-shares of the same company, reflecting liquidity, investor structure, and tax policy differences[6] - Historical analysis shows that the AH premium rate has generally favored A-shares, but there have been periods where H-shares traded at a premium[9] Group 2: Historical Changes and Influencing Factors - The opening of the Shanghai-Hong Kong Stock Connect in late 2014 expanded foreign investment channels, impacting the flow of funds into Hong Kong stocks[7] - From 2019 to 2020, the AH premium rate increased due to changes in foreign investment preferences and a slowdown in capital inflows[8] - Specific sectors, such as financials and consumer staples, have seen varying premium rates, with some H-shares trading at a premium during certain periods[63] Group 3: Current Market Dynamics - Recent trends indicate that the Hong Kong market is experiencing a surge in liquidity, driven by a weaker US dollar and increased demand for Hong Kong dollars[19] - The influx of southbound funds has significantly increased since May 2025, contributing to the current market dynamics[23] - The report suggests that the current AH premium may not be a reliable timing indicator for investing in Hong Kong stocks due to its limited representation of the broader market[60]