Core Insights - The article emphasizes that the global technology cycle is currently being led by AI, which is rapidly penetrating various aspects of the economy and society [1] - China's economy is in a transitional phase, where technological innovation is crucial for upgrading industrial structures, making the tech industry a key focus for policy support [1] - The Hong Kong stock market is experiencing a profound value reassessment, driven by three main forces: transformation of the industrial landscape, global capital reallocation trends, and the restructuring of valuation systems [2] Group 1 - AI is accelerating its integration into the economy and society, marking a new wave of technological advancement [1] - The Hong Kong stock market is becoming a pioneer in the revaluation of Chinese assets, particularly in the AI sector, which includes core assets across the entire industry chain [1] - The market structure has fundamentally changed, with technology and consumer industries now accounting for a significant portion of market capitalization, altering the previous dominance of finance and real estate [1] Group 2 - Chinese assets are becoming a safe haven for international capital as it moves away from dollar-denominated assets, leading to a surge in high-quality company listings in the Hong Kong market [2] - The proportion of overseas funds allocated to Chinese assets remains historically low, indicating potential for significant inflows once market sentiment stabilizes [2] - The influx of southern capital has led to a continuous repair of Hong Kong stock valuations, which still have considerable room for growth compared to previous peaks in early 2018 and early 2021 [2]

Group 1 - The core viewpoint indicates that there has been a notable improvement in foreign capital inflow into the Hong Kong stock market from May to the end of July, with long-term stable foreign capital inflowing approximately 67.7 billion HKD and short-term flexible foreign capital inflowing about 16.2 billion HKD [1] - The expectation of interest rate cuts by the Federal Reserve, driven by disappointing U.S. inflation and employment data, is likely to enhance liquidity conditions, which may further stabilize and improve foreign capital inflow into the Hong Kong market [1] - The valuation of Hong Kong technology stocks is considered attractive, with the Hang Seng Index and Hang Seng Tech PE (TTM) at 11.5 times and 21.4 times respectively, indicating significant room for improvement compared to their 2021 valuation peaks [1] Group 2 - The Hang Seng Index and Hang Seng Tech PE are at historical percentiles of 58% and 20% respectively since 2005, which are lower than major global indices such as the S&P 500 (93%), Germany's DAX (79%), and the UK's FTSE 100 (78%), suggesting that Hong Kong stocks are not overvalued compared to global peers [1] - The Hong Kong stock market is expected to benefit from a stable improvement in foreign capital, which could drive the market upward [1] - The article mentions specific ETFs related to technology, including the Hang Seng Internet ETF and the Hang Seng Technology Index ETF, indicating a focus on technology sector investments [2][3]