Core Viewpoint - The Hong Kong stock market experienced a pullback after reaching new highs, with the Hang Seng Index and Hang Seng Tech Index both declining, but there remains potential for upward movement, particularly in the technology sector [1][3][4]. Market Performance - As of October 8, the Hang Seng Index fell by 0.48% to 26,829.46 points, while the Hang Seng Tech Index decreased by 0.55% to 6,514.19 points [3]. - The Hang Seng Index had previously reached a year-to-date high of 27,381.84 points on October 2, marking a 1.61% increase on that day [3]. - Year-to-date performance shows the Hang Seng Index and Hang Seng Tech Index have risen by 33.75% and 45.79%, respectively [5]. Fund Performance - Several Hong Kong-themed funds have performed exceptionally well, with some achieving returns of up to 155% in the first three quarters of the year [5]. - Specific funds, such as the Huatai-PineBridge Hong Kong Advantage Selected Mixed Fund, reported returns of 155.14% and 155.09% for different share classes [5]. Sector Focus - The technology sector, particularly in areas like AI, semiconductors, and innovative pharmaceuticals, is expected to remain a focal point for investors [4][6]. - The China A-share market's performance during the holiday period contributed to capital inflows into the Hong Kong market, leading to short-term gains [4]. Future Outlook - Analysts suggest that the Hong Kong market still has upward potential, especially if the Federal Reserve maintains a low-interest-rate environment and if Chinese assets remain relatively undervalued [4][6]. - The market is anticipated to continue its valuation recovery, with the technology sector being a key area of interest for future investments [6][7].

Group 1 - The equity market has shown significant profit effects this year, with equity assets becoming a major driver for the net value growth of public funds. As of August 15, the number of funds with a net value growth rate exceeding 100% has reached 16 [1] - Among these "doubling funds," 15 have heavily invested in the innovative drug sector, benefiting from the ongoing performance of this market segment. The future performance of the innovative drug sector is expected to remain promising due to still relatively low valuations of some targets [1][2] - As of August 15, there are a total of 209 funds with a net value growth rate of over 50% this year, with 16 of them achieving over 100% growth [1] Group 2 - The top-performing fund, Huatai-PB Hong Kong Advantage Selected Mixed (QDII) A, has a year-to-date net value growth rate of 143.24%. The fund continues to favor the innovative drug direction with a stock investment ratio of 92.65% as of the end of Q2 [2] - Other funds, such as Changcheng Medical Industry Selected Mixed and Bank of China Hong Kong Stock Connect Medical Mixed, also focus on the innovative drug theme. The fund manager of Nuon Selected Value Mixed noted that the innovative drug sector has been driven by expectations of large external licensing deals [2] - The impressive performance has attracted continuous market inflows, leading to significant growth in the scale of some "doubling funds." As of August 14, the listed fund scales of GF CSI Hong Kong Innovative Drug (QDII-ETF) and Huatai-PB National Index Hong Kong Stock Connect Innovative Drug ETF have reached 19.043 billion and 14.994 billion respectively [2] Group 3 - The fund manager of Huatai-PB Hong Kong Advantage Selected Mixed (QDII) believes that the market's investment understanding of the innovative drug sector is still evolving, with continuous emergence of unexpected overseas projects driving overall valuation increases [3] - The innovative drug sector is currently in a historical phase where domestic innovative drugs are transitioning from imitation to following and then to surpassing. The potential upper limit of this innovative drug market cycle is expected to exceed the previous cycle where domestic pharmaceutical companies acted as outsourcing partners for overseas firms [3] - Despite the high year-to-date growth of the innovative drug sector, the valuation of the Hang Seng Hong Kong Stock Connect Innovative Drug Selected Index is at a historically low level, indicating significant upside potential. The core driving logic of innovative drugs—domestic policy benefits and globalization breakthroughs—remains unchanged in the long term [3]

Group 1 - Over 300 active equity funds have reached new year-to-date highs in net value since April 7, driven by structural investment opportunities and a focus on domestic consumption [1][2] - As of April 28, 38 funds achieved new year-to-date highs, with a total of 302 funds since April 7, reflecting a market rebound supported by favorable policies [1][2] - Funds heavily invested in the consumer sector, such as Guotai Consumer Select and Pengyang Consumer Industry Mixed Fund, have shown remarkable performance amid rising domestic demand [1] Group 2 - The Shunwan Lingxin LeRong One-Year Holding Mixed Fund has reported over 30% returns year-to-date, focusing on trendy toys, gold jewelry, and pet-related sectors [2] - The Longcheng Pharmaceutical Industry Selected Mixed Fund has achieved a year-to-date return of 49.78%, with several other pharmaceutical funds also exceeding 35% returns [2] - Fund managers are increasingly adapting their strategies to capture emerging consumption opportunities, moving away from traditional investment paths [3] Group 3 - Fund managers emphasize the importance of understanding consumer demands and adapting to the preferences of younger generations, which is driving a new consumption cycle [3] - Investment strategies are evolving to include a broader range of assets and sectors, focusing on growth stocks, policy-driven companies, and dividend-paying value companies [3]