BOCOM International·2025-08-01 05:19Overview - The report highlights the synergy between the "anti-involution" policy and domestic demand policies, which is expected to drive the Hong Kong stock market to new highs in 2025 [2][5] - The "anti-involution" policy is being implemented across multiple industries, likely curbing price wars and boosting corporate profit expectations [2][5] - Demand-side policies, such as infrastructure projects and childcare subsidies, are providing positive support for market sentiment [2][5] Macro Strategy - The liquidity environment remains loose, but there are warnings about the potential for a temporary strengthening of the US dollar [2][3] - The Federal Reserve's interest rate cuts may be delayed until the fourth quarter of 2025 due to resilient economic indicators in the US [2][3] - Despite the crowded short positions on the dollar, the current liquidity in the Hong Kong market is ample, with reasonable valuation levels providing an ideal allocation window for investors [2][3] Industry Allocation Strategy - The report maintains a "high elasticity" and "high dividend" barbell strategy for industry allocation [4][6] - The internet and AI hard technology sectors are expected to benefit from a slowdown in subsidy wars, with corporate profits likely to be revised upwards [6] - The biopharmaceutical sector is supported by ample funding from overseas pharmaceutical giants and a rich pipeline of innovative drugs in mainland China [6] - Traditional industries and emerging sectors like photovoltaics and lithium batteries are expected to benefit from improved industry competition dynamics due to the "anti-involution" policy [6] - High-dividend sectors such as banking and insurance are recommended as stable income sources during market volatility [6] Company Highlights - China Ping An (2318HK): Expected to benefit from a favorable stock market environment, with an attractive valuation and a target price of HKD 73.00, representing a potential upside of 35.3% [7][9] - Link REIT (823HK): Anticipated to maintain stable dividends with a target price of HKD 47.70, reflecting an 8.7% potential upside, supported by a favorable consumption environment [15][17] - OmniVision Technologies (603501CH): Positioned to benefit from domestic semiconductor supply chain localization and rising automotive demand, with a target price of RMB 180.00, indicating a potential upside of 48.4% [20][22] - Alibaba (BABAUS/9988HK): Expected to see valuation adjustments driven by AI and cloud business leadership, with a target price of USD 165, representing a potential upside of 40.6% [28][30] - Xpeng Motors (9868HK): Projected to achieve breakeven due to strong new car cycles, with a target price of HKD 134.69, indicating an 88.1% potential upside [34][36] - Zymeworks (6996HK): Highlighted for its promising drug pipeline and potential for significant revenue growth, with a target price of HKD 6.60, representing a 14.2% upside [41][43] - Anta Sports (2020HK): Expected to drive high-quality growth through a multi-brand strategy, with a target price of HKD 110.20, indicating a potential upside of 22.4% [45][47]