Valuation Insights - The Hang Seng Index is trading at a P/E of 13.5x, which is over 40% cheaper than the S&P 500, Nikkei 225, and KOSPI[3] - The Hang Seng TECH Index has a P/E of 24.2x, representing a 46% discount to ChiNext and a 37% discount to the Nasdaq[3] - The valuation percentile for the Hang Seng TECH Index is only 24% over the past five years, indicating significant valuation compression[3] Market Dynamics - The recent correction in Hong Kong equities is attributed to "AI anxiety," capital outflows to Japan and Korea, and geopolitical risks in the Persian Gulf[2] - Local funds have maintained a high short-selling turnover of around 20% due to uncertainties surrounding profitability and policy[2] - The market's expectations for stabilization in China's property sector and recovery in domestic demand remain low and underpriced[4] Investment Opportunities - "Hardcore assets" in Hong Kong, particularly in low-valued upstream and midstream industries, are becoming increasingly attractive, with energy dividend yields at 5.2%[4] - The property sector is expected to stabilize structurally, providing alpha opportunities in related sectors such as base metals, steel, and construction machinery[4] - New technology assets benefiting from the AI wave are also seen as scarce growth opportunities, with improved valuation appeal following recent market corrections[4]