Core Viewpoint - The Hong Kong stock market is expected to experience a dual boost from earnings and valuations in the coming year [1] Group 1: Liquidity Perspective - The anticipated expansion of the Federal Reserve's balance sheet is viewed positively for Hong Kong stocks [1] - A downward trend in the dollar cycle is expected to enhance overseas liquidity, benefiting the Hong Kong market [1] Group 2: Fundamental Perspective - There is an expectation for a turning point in the Producer Price Index (PPI) domestically next year [1] - Certain assets are anticipated to have opportunities for earnings upgrades [1]

Group 1 - The Shanghai Composite Index has shown strong performance, surpassing 3674.4 points, marking a new high since December 17, 2021 [1] - The Securities ETF (159841) has seen a 1.81% increase, with significant gains from constituent stocks such as Guosheng Financial Holdings and Zhongyin Securities [1] - The Securities ETF has experienced continuous net inflows, accumulating over 220 million yuan in the past seven days [1] Group 2 - Huaxi Securities notes that the current market rally is supported by various sources of incremental funds, including insurance, pension funds, public and private equity funds, as well as retail investor capital [2] - The M1-M2 year-on-year growth rate gap has been narrowing, indicating an increase in fund activation and a slight recovery in consumer and investment willingness among residents [2] - The margin trading balance has reached a ten-year high, reflecting a sustained increase in risk appetite among individual investors [2]

Group 1 - The core viewpoint is that the brokerage sector is experiencing a recovery in profitability, driven by improved fundamentals, increased risk appetite, and business innovation, making it an attractive investment opportunity [1][2] - As of August 4, 2025, the National Securities Leading Index (399437) rose by 0.21%, with notable increases in stocks such as Xinda Securities (1.35%) and Dongfang Caifu (0.78%) [1] - The brokerage sector is gaining attention from funds, with a significant net inflow into the Securities ETF leading to a 0.24% increase, indicating a positive market sentiment [1][2] Group 2 - The essence of the rise in brokerage stocks is attributed to the release of market sentiment, supported by a loose funding environment, proactive policy trends, and clear favorable themes [2] - In the first half of 2025, 29 out of 42 listed brokerages reported earnings that exceeded expectations, with an overall year-on-year growth rate of approximately 70% and a quarter-on-quarter increase of 10% in Q2 [2] - The brokerage sector is expected to see a year-on-year earnings growth of 25%-30% for the full year, bolstered by developments in mergers and acquisitions and innovations in financial technology [2] Group 3 - The Securities ETF closely tracks the National Securities Leading Index and aims to reflect the market performance of quality listed companies in the securities theme [3] - As of July 31, 2025, the top ten weighted stocks in the National Securities Leading Index accounted for 78.84% of the index, with major players including Citic Securities and Dongfang Caifu [3]