Soochow Securities·2025-07-06 13:21Group 1 - The core viewpoint of the report emphasizes the significant potential for valuation recovery in the Hang Seng Stock Connect Technology Theme ETF, supported by favorable policies for the technology sector [1][5][6] - The Hang Seng Stock Connect Technology Theme Index (HSSCITI) is currently at a historically low valuation level, with a PE-TTM of 21.92 times and a PB-LF of 3.15 times as of June 30, 2025, indicating a higher safety margin and potential for appreciation [14][15][17] - The technology sector is driven by multiple factors, including continuous inflow of southbound funds into the Hong Kong stock market, which enhances market activity and investor confidence [26][30][31] Group 2 - The report highlights the increasing demand and integration within the information technology equipment industry, with a net inflow of 32 billion RMB and a growth rate of 58.9% from January 1, 2025, to June 30, 2025 [36] - The software services industry is experiencing innovation-driven growth, supported by regulatory improvements, such as the release of guidelines for generative artificial intelligence technology in Hong Kong [36][34] - The professional retail sector is benefiting from a consumption recovery and favorable policies, with a 5.0% year-on-year increase in total retail sales in China as of May 2025 [36][34] Group 3 - The HSSCITI index is concentrated in the information technology sector (66.9%), with significant representation from consumer discretionary (17.9%) and communication services (15.2%) [36][63] - The index's composition includes six sub-industries: software services, information technology equipment, professional retail, media and entertainment, semiconductors, and industrial engineering, reflecting a diverse yet focused investment strategy [36][63][64] - The report indicates that the index's historical performance has been superior to comparable indices, showcasing its potential for long-term investment [9][36]