Core Viewpoint - The Hong Kong stock market experienced a significant rebound on November 24, with the Hang Seng Index rising by 1.97% to close at 25,716.50 points, and the Hang Seng Tech Index increasing by 2.78% to 5,545.56 points. This rebound follows a period of deep correction in the tech sector due to concerns over high valuations in AI and a strong US dollar, influenced by hawkish signals from the Federal Reserve [1]. Market Analysis - The short-term outlook for the Hong Kong stock market remains uncertain, with ongoing fluctuations expected due to mixed signals regarding interest rate cuts and the reassessment of AI risks. The market is advised to await the upcoming Federal Reserve and domestic policy meetings in December for potential improvements in risk appetite [1]. - From a mid-term perspective, the AI industry cycle is not yet complete, and the technology sector remains a key focus. The scarcity of tech assets in the Hong Kong market continues to be attractive, with valuations still considered low compared to global standards [1]. - Despite the recent market pullback, there was a net inflow of HKD 38.6 billion from southbound funds, indicating resilience in mid-term allocations to Hong Kong stocks. This suggests that investors are still interested in key internet and smart manufacturing leaders, providing a potential opportunity for strategic investments [1]. Investment Recommendations - It is recommended to gradually allocate investments into Hong Kong tech ETFs (513020), particularly focusing on internet and smart manufacturing leaders that have seen significant net buying from southbound funds [1].

Market Overview - On November 3, the Hong Kong stock market experienced fluctuations, ultimately closing up 0.97% at 26,158.36 points. The Hang Seng Index's PE ratio is approximately 12.1 times, positioned at the historical percentile of about 63% [1] - The Hang Seng Tech Index has a PE ratio of about 24.6 times, significantly lower than the comparable indices in A-shares, with a percentile of around 37% since data collection began [1] Valuation Insights - If the undervalued technology leaders' valuations recover to the average percentile of constituent stocks, the Hang Seng Tech Index could potentially rise by about 15%. If it returns to historical averages, the upside could exceed 30% [1] Capital Flow - Southbound capital has seen a cumulative net inflow of 1.2 trillion HKD this year, marking a new high since the launch of the Stock Connect program. The HIBOR has stabilized after being at a high level, and the Federal Reserve's initiation of a rate-cutting cycle is expected to enhance global liquidity, marginally boosting risk appetite for Hong Kong stocks [1] Market Outlook - Although short-term market trends may experience pullbacks due to differing views on the rate-cutting schedule in December, the overall trend of improving capital flow remains unchanged, suggesting a potential continuation of a slow bull market for Hong Kong stocks [1] Investment Strategy - Currently, a combination of technology growth and low-volatility dividend stocks may represent an optimal investment choice. The concentration of AI applications and internet software in Hong Kong stocks is higher, with narratives driven by performance and capital expenditure expected to strengthen in Q4. If the market focus shifts to performance verification by 2026, dividend sectors may attract capital flows to take over [1] - A balanced investment strategy is recommended, including allocations to dividend-focused Hong Kong stock ETFs (159331) and Hong Kong tech ETFs (513020) [1]

Group 1 - The core viewpoint of the articles indicates that the Hong Kong stock market is experiencing a rebound after a period of adjustment, driven by factors such as the easing of the US-China trade dispute and strong performance in the technology sector [1][2]. Group 2 - On October 20, the Hong Kong stock market opened higher and maintained a strong position throughout the day, closing up 2.42% at 25,858.83 points [1]. - Recent discussions between Chinese and US officials regarding bilateral economic relations are seen as constructive, with an agreement to hold new trade consultations soon, which may alleviate short-term market volatility [1]. - The technology sector continues to show robust growth, providing structural opportunities for the Hong Kong stock market despite recent cooling market sentiment [1]. - External liquidity is improving, with continued inflows from foreign and southbound funds, suggesting that Hong Kong stocks still hold valuation advantages [1]. - The expectation of a potential interest rate cut by the US Federal Reserve, driven by easing inflation and economic growth concerns, could further attract foreign investment into the Hong Kong market [1]. - The fourth quarter is anticipated to accumulate favorable factors for the Hong Kong stock market, including the rapid development of the technology sector and improved external liquidity [2].

Market Overview - The Shanghai Composite Index rose by 0.63% to close at 3863.89 points, while the Shenzhen Component Index increased by 0.98% to 12813.21 points. The trading volume significantly decreased to 1.75 trillion yuan, marking a two-month low. The communication and coal sectors led the gains, while the non-ferrous metals sector was dragged down by the pullback in gold and silver prices. The market is expected to continue a structural trend with oscillations as the profit inflection point has not yet been reached [1] Hong Kong Market - The Hong Kong stock market opened higher and maintained a high-level oscillation throughout the day, ultimately closing up 2.42% at 25858.83 points. The recent U.S.-China trade disputes had caused a decline in market sentiment, leading to adjustments in the Hong Kong market. If the trade disputes further ease, the Hong Kong market, which has been under emotional pressure, is likely to gather rebound momentum. Investors are recommended to keep an eye on the Hong Kong Stock Connect 50 ETF (159712) and the Hong Kong Technology ETF (513020) [1] Communication Sector - The Communication ETF (515880) increased by 3.39%. The industry fundamentals are improving, with Nvidia's Rubin shipment expectations for 2026 being raised, and leading companies may start to adjust their total demand for 1.6T to 15 million units, indicating further upward potential. This demand adjustment not only enhances the profit expectations for leading firms but also reinforces the sustainability and certainty of the high prosperity cycle for optical modules driven by AI computing power. Additionally, Google's Gemini 3 series is expected to be released on October 22, which may catalyze the sector's performance. The market is currently facing multiple event disturbances, and the sector may continue to oscillate. Interested investors are advised to monitor the Communication ETF (515880), the ChiNext AI ETF (159388), and the Semiconductor Equipment ETF (159516) [2] Dividend and State-Owned Enterprises - The Dividend State-Owned Enterprises ETF (510720) rose by 1.41%. The current market risk appetite has decreased, coupled with the coal and banking sectors leading the gains, resulting in the continued relative strength of the dividend sector. In the short term, with the third-quarter report season approaching and external uncertainties still present, the cost-performance ratio of dividend styles is highlighted. Investors are encouraged to focus on the Dividend State-Owned Enterprises ETF (510720) and the Cash Flow ETF (159399) to position themselves in dividend assets [2]

Group 1 - The core viewpoint indicates that despite a decrease in market risk appetite due to geopolitical conflicts, the Hong Kong stock market, particularly the technology sector, is expected to recover in the second half of the year, driven by domestic policy support and improving capital flows [1][2] - The profitability of the Hong Kong technology sector is projected to grow significantly by 2025, with a strong certainty in earnings growth, supported by favorable expectations from the AI industry [1] - The current valuation of the Hang Seng Index is in a balanced range, suggesting potential for improvement in return on equity (ROE) for the technology sector, which could lead to an increase in valuations [1] Group 2 - The outlook for the Hong Kong stock market remains positive, particularly for the technology sector, as the narrative of asset revaluation in China continues to unfold, despite external factors potentially disrupting risk appetite and earnings expectations [2] - The capital flow situation is improving, with foreign capital outflows narrowing and domestic institutional investments increasing, indicating a shift in the investment landscape towards Hong Kong stocks [1][2] - The net inflow of southbound funds, primarily driven by retail investors in 2024, is expected to see a shift towards institutional investors in 2025, which may further enhance capital inflows into the Hong Kong market [1]