Core Viewpoint - Foreign capital is continuously increasing its investment in China, with significant inflows into the Hong Kong stock market, indicating a strong bullish sentiment despite recent market fluctuations [1][5]. Group 1: Southbound Capital Inflows - As of August 18, southbound capital has seen a record net inflow of over 940 billion HKD this year, marking a historical high [1][5]. - Analysts predict that the total net inflow for the year could exceed 1.2 trillion HKD, which is expected to support the upward trend of the Hong Kong stock market [1][6]. Group 2: Market Performance Comparison - The Hong Kong stock market has underperformed compared to the A-share market since mid-June, with the Hang Seng Index and Hang Seng Tech Index experiencing maximum gains of 33% and 49% respectively in the first half of the year [4]. - Despite the recent downturn in the Hong Kong market, southbound capital has accelerated its buying pace, with a record single-day net purchase of 358.76 billion HKD on August 15 [4][5]. Group 3: Investment Strategies - Current investment strategies among southbound capital focus on two main areas: undervalued, high-dividend assets and technology-related assets [10][12]. - Institutional investors are generally optimistic about high-dividend stocks in the Hong Kong market, emphasizing the importance of value and growth expectations in their investment principles [11][12]. Group 4: Sector Preferences - The preference for low-valuation, high-dividend assets is evident among insurance funds, while retail and private equity investors are leaning towards short-term improvement stocks, such as new consumption sectors [10][12]. - The technology sector, particularly in AI and innovative pharmaceuticals, is also gaining attention due to its growth potential and scarcity in the market [12].

Core Viewpoint - Southbound capital has experienced explosive growth in 2023, with a cumulative net inflow exceeding 940 billion HKD, marking a historical high [2][3]. Group 1: Southbound Capital Inflow - As of August 18, 2023, the cumulative net inflow of southbound capital reached over 940 billion HKD, surpassing the total for the entire year of 2024 [9]. - Forecasts suggest that the total net inflow for the year could exceed 1.2 trillion HKD, which is expected to support the upward trend of the Hong Kong stock market [3][12]. - The recent trend shows that southbound capital is increasingly targeting undervalued, high-dividend assets and technology-related assets [4][15]. Group 2: Market Performance - The Hang Seng Index and the Hang Seng Technology Index saw maximum increases of 33% and 49% respectively in the first half of the year, but have underperformed compared to A-shares since mid-June [5]. - On August 18, the Hang Seng Index fell by 0.37%, while the Hang Seng Technology Index rose by 0.65%, indicating a mixed performance in the market [7]. - Despite the recent pullback in the Hong Kong market, southbound capital has accelerated its buying pace, with a record single-day net purchase of 358.76 billion HKD on August 15 [8][9]. Group 3: Investment Strategies - Current investment strategies among southbound capital include a focus on low-valuation, high-dividend assets and high-growth technology assets [4][15]. - Institutional investors are generally optimistic about the dividend potential of Hong Kong stocks, favoring assets with lower valuations and higher growth expectations [16]. - The investment approach often involves a "barbell strategy," balancing between high-dividend stocks and high-growth technology stocks [16]. Group 4: Market Outlook - The long-term outlook for Hong Kong stocks remains positive due to the presence of scarce assets and the potential for valuation recovery in a low-risk interest rate environment [14]. - The technology and high-dividend sectors are viewed as core assets with significant investment value, especially in the context of a declining interest rate environment [17][18]. - There is a consensus among analysts that the high-dividend and technology growth sectors in Hong Kong are likely to attract continued inflows from southbound capital [17][18].