Core Viewpoint - Hong Kong stocks have a relatively high medium to long-term allocation value due to their low absolute valuation and historical mid-to-high valuation percentiles [1] Group 1: Investment Opportunities - The technology sector continues to present significant investment opportunities, supported by favorable policies, strong profit growth, and low historical valuations, indicating substantial future upside potential [1] - The consumer sector is expected to see improved earnings growth due to domestic consumption stimulus policies, with undervalued Hong Kong consumer stocks, particularly in the pharmaceutical and discretionary consumption industries, likely to rise [1] - High dividend stocks can provide investors with stable returns amid domestic and international uncertainties [1]

Group 1 - Major industry ETFs showed mixed performance in early trading, with the global airline industry ETF rising nearly 3% and the gold ETF declining over 2% [1] - The global airline ETF (JETS) increased by 0.65 to 22.64, reflecting a 2.96% rise [2] - The semiconductor ETF (SMH) rose by 7.16 to 269.08, marking a 2.73% increase [2] Group 2 - The regional bank ETF (KRE) saw an increase of 1.13 to 58.99, which is a 1.94% rise [2] - The global technology stock ETF (IXN) increased by 1.42 to 89.48, representing a 1.61% rise [2] - The technology sector ETF (XLK) rose by 3.23 to 246.11, indicating a 1.33% increase [2] Group 3 - The financial sector ETF (XLF) increased by 0.65 to 51.47, reflecting a 1.27% rise [2] - The network stock index ETF (FDN) rose by 2.79 to 259.38, marking a 1.09% increase [2] - The consumer discretionary ETF (XLY) decreased by 1.88 to 216.28, showing a decline of 0.88% [2] Group 4 - The utility ETF (XLU) increased by 0.34 to 81.58, reflecting a 0.41% rise [2]

Group 1 - The article emphasizes the importance of focusing on industries with marginal structural changes as the earnings forecast period approaches, suggesting that sectors with inventory depletion and contract liabilities are likely to see performance improvements [4] - The North American AI hardware supply chain is highlighted as a preferred investment area, along with sectors expected to report good earnings and reasonable valuations such as wind power, gaming, and pet industries [1][3] - The article discusses the potential for a rebound in the Hong Kong stock market, particularly in electric vehicles, innovative pharmaceuticals, and new consumption sectors, despite recent weakness due to liquidity tightening and increased share placements [1][3] Group 2 - The article notes that external risks, such as the potential for tariffs from the U.S. and the impact of tax legislation, could negatively affect non-U.S. markets [2] - It suggests that the trend of the U.S. dollar depreciating may benefit Chinese assets, with the Hong Kong market expected to see increased liquidity and investment opportunities as a result [5][6] - The article indicates that the A-share market is likely to experience a volatile upward trend in the second half of the year, supported by policy measures and the expansion of equity funds [8] Group 3 - The article highlights the importance of structural investment opportunities, particularly in sectors that are experiencing growth due to economic transformation and rising consumer income [9] - It suggests that the A-share market is currently in a phase of consolidation, with external uncertainties and domestic demand issues impacting performance [10][13] - The article recommends focusing on defensive assets and sectors with high dividend yields, as well as technology and consumer sectors that are expected to benefit from policy support [8][12]

Group 1 - The core index, the CSI Hong Kong-Shenzhen IoT Theme Index, has shown a decline of 0.01% to 4146.62 points with a trading volume of 58.01 billion yuan [1] - Over the past month, the index has decreased by 2.24%, and over the last three months, it has fallen by 11.73%, while year-to-date it has increased by 2.30% [1] - The index comprises companies involved in IoT-related information collection, transmission, and computing, reflecting the overall performance of IoT-related listed companies in the mainland and Hong Kong markets [1] Group 2 - The top ten weighted companies in the index include Luxshare Precision (5.52%), Midea Group (5.19%), Xiaomi Group-W (5.14%), Tencent Holdings (5.03%), Meituan-W (4.47%), Li Auto-W (4.38%), Xpeng Motors-W (4.13%), China Telecom (4.02%), Huichuan Technology (3.82%), and Zhongji Xuchuang (3.77%) [1] - The market share of the index's holdings is distributed as follows: Shenzhen Stock Exchange 41.44%, Hong Kong Stock Exchange 32.67%, and Shanghai Stock Exchange 25.90% [1] Group 3 - The industry composition of the index's holdings shows that Information Technology accounts for 45.69%, Communication Services 25.15%, Consumer Discretionary 21.19%, Industrials 5.61%, and Healthcare 2.35% [2] - The index samples are adjusted biannually, with adjustments occurring on the next trading day after the second Friday of June and December [2] - Public funds tracking the SHS IoT index include Tianhong CSI Hong Kong-Shenzhen IoT Theme Connection A, Tianhong CSI Hong Kong-Shenzhen IoT Theme Connection C, and Tianhong CSI Hong Kong-Shenzhen IoT Theme ETF [2]

Investment Rating - The report maintains a cautious investment stance on the consumer sector, particularly for low-priced consumer goods and imported durable goods due to ongoing uncertainties and potential economic risks [5]. Core Insights - The consumer confidence index rebounded significantly in June, reaching 60.5, up 15.9% from May's 52.2, indicating a recovery from previous declines [8][9]. - Retail sales in May 2025 were $715.42 billion, a 0.9% month-over-month decline, marking the largest single-month drop since March 2023 [9]. - Inflation data showed a mild increase in May, with the CPI rising 2.4% year-over-year, below market expectations, but long-term inflation risks remain [11][13]. - Employment data showed a mixed picture, with non-farm payrolls adding 139,000 jobs in May, exceeding expectations, but revisions indicated a slowdown in job growth [15][19]. Summary by Sections Macro Overview - The consumer confidence index rebounded in June, reflecting a recovery from previous declines, with inflation expectations decreasing from 6.6% to 5.1% [8]. - Retail sales data for May showed a significant decline, particularly in durable goods, as the demand normalized following a previous surge [9]. - Inflation data indicated a mild increase, with CPI rising 2.4% year-over-year, but long-term inflation concerns persist due to potential tariff impacts [11][13]. - Employment data showed a stable job market, but with signs of sectoral divergence, particularly in manufacturing and services [15][17]. Essential Consumption - Beverage and tobacco sectors outperformed the market, with beverage sales showing resilience, while alcoholic beverages and dairy products continued to underperform [2][34]. - Alcoholic beverage retail sales in April were $5.63 billion, with a year-over-year increase of 1.6%, but overall sales volume continued to decline [2][29]. - Dairy product shipments totaled $13.61 billion in April, with a year-over-year increase of 2.5%, indicating a stable but lackluster performance [34]. - Beverage shipments reached $11.97 billion in April, with a year-over-year increase of 4.7%, showcasing strong demand in essential categories [34]. Optional Consumption - The restaurant sector showed resilience with retail sales of $97.36 billion in May, a year-over-year increase of 5.3%, but a month-over-month decline of 0.9% [39]. - Department store sales in May were $76.76 billion, reflecting a year-over-year increase of 2.2%, but a continued weakening trend [42]. - Apparel retail sales reached $26.18 billion in May, with a year-over-year increase of 3.7%, but a decline in momentum due to the end of pre-tariff purchasing [44]. Market Performance - The consumer sector saw a broad rally in May, with significant gains in essential and discretionary categories, although valuations remain at historical highs [4]. - The consumer discretionary ETF saw a net inflow of $553 million, while the essential consumer ETF had a net inflow of $522 million, indicating investor interest [4]. Investment Recommendations - The report advises maintaining a cautious approach towards the consumer sector, particularly in light of ongoing uncertainties related to tariffs and economic growth [5].

Core Insights - The report by CITIC Securities highlights the changing dynamics of global stock markets, indicating a shift from a "single core" investment strategy to a "regional diversification" approach, particularly in developed markets [3] - In emerging markets, there is a notable concentration in Asia, with China, India, and Taiwan collectively accounting for over 66% of the market [3] Market Structure - In developed markets, the weight of the US remains high at 71.46%, but has decreased, while Japan, France, and other developed markets are gaining weight [3] - The technology sector continues to dominate the global market, with information technology and finance accounting for over 42% in developed markets [3] - Emerging markets show a rise in technology and stable finance sectors, while resource sectors maintain relative strength [3] Regional Characteristics - China focuses on technology and manufacturing, showing high capital concentration and increasing capital attractiveness [3] - India's market structure is balanced with active consumption, finance, and industry sectors, benefiting from domestic demand and demographic advantages [3] - Japan's market is characterized by industrial and consumer discretionary sectors, reflecting traditional manufacturing strengths [3] - Hong Kong and Singapore maintain their status as financial centers, with telecommunications and finance leading in market capitalization and trading [3] - Australia continues to exhibit resource-oriented characteristics, while Southeast Asia's market structure is fragmented and less active, indicating a developing capital market [3] Valuation Levels - Global stock market valuations are generally rising, with significant differentiation at the industry level [4] - The US market shows high valuations and strong profitability, with the S&P 500 and NASDAQ 100 PE ratios exceeding 25 and 33, respectively, and ROE above 18% [4] - European markets have moderate valuations, with Germany's DAX high but limited profitability, while UK and French markets exhibit lower valuations and earnings [4] - Asian markets show significant valuation and profitability disparities, with South Korea being attractively valued but with weak earnings, while India sees a valuation decline [4] - The technology sector shows notable valuation differences, with Germany at historical highs and South Korea undervalued; the financial sector in the US and Australia is highly valued, while some Southeast Asian markets are significantly undervalued [4]

Macro Commentary - The economic recovery in China remains unbalanced, with May data showing significant retail sales growth supported by the old-for-new policy, while real estate sales have declined further and industrial output growth has generally slowed [2] - GDP growth is expected to slow from 5.4% in Q1 2025 to 4.9% in Q2 and 4.7% in the second half of the year, potentially facing headwinds from weakening exports and diminishing effects of the old-for-new policy [2] - If a preliminary trade agreement is reached between China and the US, China may focus on economic rebalancing, increasing fiscal expansion and consumer stimulation, and promoting capacity reduction in manufacturing [2] Market Performance - Major global stock indices showed positive performance, with the Hang Seng Index closing at 24,061, up 0.70% year-to-date, while the S&P 500 increased by 0.94% to 6,033 [2] - The Hang Seng Tech Index rose by 1.15% year-to-date, reflecting a strong performance in the technology sector [2] - The performance of various sectors in the Hong Kong market was mixed, with financials and industrials leading gains, while real estate and healthcare sectors faced declines [4] Sector Analysis - The automotive sector is highlighted with companies like Geely Automobile and Xpeng Motors rated as "Buy," with target prices indicating potential upside of 46% and 50% respectively [6] - The equipment manufacturing sector also shows promise, with companies like Zoomlion and Sany Heavy Industry rated as "Buy," suggesting potential price increases of 19% and 24% respectively [6] - In the consumer sector, Luckin Coffee and PepsiCo are rated as "Buy," with expected price increases of 15% and 61% respectively, indicating strong growth potential [6] Credit and Economic Support - China's credit situation remains weak, driven by government financing, while private sector credit demand is still sluggish [5] - The social financing scale growth rate has rebounded due to accelerated government bond issuance, but household confidence is affected by tariff shocks, impacting housing and consumption [5] - More policy support is needed to revitalize private economic recovery, with expectations of a further 10 basis point reduction in LPR by the second half of 2025 [5]

今年上半年，港股市场表现出色，恒生指数领涨全球主要指数，离不开政策面多维度持续发力，夯实了市场上行的基础。 据数据统计，截至6月11日，南向资金年内累计净流入已达6755.53亿港元，刷新历史同期纪录。4月初，受美国"关税政策"影响，恒指再次跌破20000点整数 关。不过，也为南向资金涌入提供了绝佳买点。4月9日，南向资金单日净买入额达355.87亿港元，刷新历史纪录，凸显资金逢低布局的积极性。 截至6月11日的公开信息预估，港股市场上半年预计约40家公司首发上市，筹资额约1087亿港元，IPO数量和筹资额分别同比上涨33%和711%。这一成绩的 取得，得益于大型IPO的推动，预计上半年的筹资额将超过去年全年筹资总额。 产业政策引导：助力新兴企业加速上市 从产业特点来看，内地对优质生产力的扶持政策促使企业通过港股IPO加速发展进程。在支持人工智能、半导体、新能源等产业发展的大背景下，相关企业 纷纷选择在港股上市。这些企业具有高成长性、创新性强等特点，符合港股市场对科技和新兴产业的定位。例如，一些人工智能企业在港股上市后，借助资 本市场的力量，加大研发投入，拓展业务领域，迅速提升了市场竞争力。港股市场为这些企业 ...

Core Viewpoint - The periodic adjustment of A-share indices took effect on June 16, 2025, impacting various indices including the Shanghai Stock Exchange 50, 180, 380, and the ChiNext indices, among others [1][3]. Group 1: Index Adjustments - A total of 187 sample stocks were replaced across six major cross-market indices, with the CSI 300 index changing 7 stocks, the CSI 500 changing 50 stocks, and the CSI 1000 changing 100 stocks [3][16]. - The newly added stocks include notable companies such as Softcom Power and AVIC Chengfei [3][20]. Group 2: Sector Representation - The adjustments reflect a shift towards enhancing representation in sectors like information technology, communication services, and industrials, with the CSI 500 index seeing a 1.82% increase in the weight of the information technology sector [16][19]. - The manufacturing sector remains dominant in the Shenzhen Component Index, accounting for 73% of the sample companies, while the ChiNext index emphasizes strategic emerging industries with a weight of 92% [19][20]. Group 3: New Index Launch - The newly launched SSE 580 index focuses on smaller-cap stocks within the Shanghai market, comprising 580 securities that reflect the performance of smaller listed companies [20].

Core Viewpoint - The article discusses the challenges faced by the Shanghai Composite Index in breaking through the 3400-point barrier, highlighting the current high valuation levels and the lack of supportive policies or improved earnings expectations as key obstacles [4][10]. Valuation Analysis - The static PE ratio of the Wind All A (excluding financials) is currently at 31.51 times, which is at the 49th percentile since 2000, the 54th percentile over the past decade, and the 100th percentile over the last three years, indicating that the market is nearing its high tolerance for valuations [6][10]. - Compared to global equity markets, the valuation of Wind All A (excluding financials) is relatively high, with the Nasdaq at 44 times, S&P 500 (excluding financials) at approximately 30 times, and the Hang Seng Tech Index at 21 times, suggesting that A-shares lack a solid foundation to maintain levels above 3400 points [9][10]. Market Conditions - The article emphasizes that without new incremental policy support or significant improvements in earnings expectations, the market is unlikely to sustain levels above 3400 points. Current trade environment pressures limit the feasibility of large-scale policy stimulus [10]. - The Producer Price Index (PPI) has shown a continuous decline, with a year-on-year drop of 3.3% in May, indicating that A-share earnings are unlikely to improve in the near term [10]. Future Market Outlook - The market is expected to experience volatility, with a higher probability of downward movement. The focus will likely shift towards sectors with more predictable earnings, suggesting a strategy of seeking certainty and avoiding underperforming stocks [10][11]. - In the absence of significant changes in policies or PPI, a notable rise in the Shanghai Composite Index above 3400 points would be seen as a signal to reduce positions rather than increase them [11]. Structural Opportunities - The article outlines different market styles based on historical data since 2015, indicating that stable styles (e.g., utilities, consumer staples) are favored during external risks or tightening policies, while cyclical styles (e.g., materials, industrials) thrive in improving economic conditions [13][14]. - Growth styles (e.g., technology, emerging industries) depend on upward industry trends, policy support, and liquidity, while consumer styles are closely tied to economic recovery and consumer confidence [15][16]. - Currently, the market environment is characterized by weak earnings and low capital inflows, which is unfavorable for cyclical, growth, and consumer styles, but relatively beneficial for stable and financial styles [19]. Investment Recommendations - The article suggests a balanced allocation strategy, focusing on sectors with potential marginal improvements such as petrochemicals, brokerages, non-ferrous metals, military, and electric power, as well as industries aligned with policy and industry trends like AI applications, gaming, communication, and semiconductors [19].