Core Viewpoint - The market is approaching a state of "bad news fully priced in," with previous risk factors such as overseas liquidity easing and the impact of the "takeout war" on the internet sector's profitability being sufficiently released during the recent pullback [1] Group 1: Market Performance - The Hang Seng Index and the China 100 Index under the Stock Connect both rose by 0.2%, while the Hang Seng China Enterprises Index increased by 0.1% [1] - The overall market sentiment remains in a pessimistic range, indicating a lack of mainline catalysts, which points towards opportunities for left-side positioning [1] Group 2: ETF Performance - The Hang Seng ETF managed by E Fund tracks the Hang Seng Index, which consists of large-cap, actively traded stocks with strong industry representation, covering financials, consumer discretionary, and information technology, accounting for nearly 80% of the index [2] - The Hang Seng China Enterprises ETF tracks the Hang Seng China Enterprises Index, composed of 50 large-cap, actively traded stocks from mainland China listed in Hong Kong, with consumer discretionary, information technology, financials, and energy sectors making up nearly 85% of the index [2] - The China 100 ETF under the Stock Connect tracks the China 100 Index, which includes 100 large-cap, actively traded mainland Chinese companies, with consumer discretionary, information technology, and financial sectors comprising nearly 75% of the index [2]

Core Viewpoint - The Hong Kong stock market indices, including the Hang Seng Index, Hang Seng China Enterprises Index, and CSI Hong Kong Stock Connect China 100 Index, all experienced a decline of 1.7% at the close. However, there is potential for upward movement in valuations, supported by historical comparisons and external factors such as anticipated foreign capital inflows exceeding 1.5 trillion yuan next year due to a low allocation in Hong Kong stocks and a backdrop of Federal Reserve interest rate cuts [1]. Group 1: Market Performance - The Hang Seng Index, Hang Seng China Enterprises Index, and CSI Hong Kong Stock Connect China 100 Index all fell by 1.7% [1]. - The rolling price-to-earnings ratio for the Hang Seng Index is currently at 12.0 times, placing it in the 55.0% valuation percentile since 2002 [2]. - The rolling price-to-earnings ratio for the Hang Seng China Enterprises Index is at 10.7 times, which is in the 65.4% valuation percentile since 2002 [2]. Group 2: Investment Opportunities - According to Guotai Junan Securities, there is potential for valuation uplift in the Hong Kong stock market, suggesting that foreign capital may return more than expected next year [1]. - The E Fund's ETF tracking the Hang Seng China Enterprises Index has officially changed its name to "Hang Seng China Enterprises ETF," aligning with the index name for better investor understanding [1].

Group 1 - The Hong Kong stock market indices collectively rose today, with the Hang Seng Index increasing by 1.9%, the Hang Seng China Enterprises Index rising by 1.6%, and the CSI Hong Kong Stock Connect China 100 Index up by 1.8% [1] - Huatai Securities indicates that the market fundamentals remain stable, supported by a liquidity-rich environment, domestic policies, and positive trends in industries such as AI, new consumption, and pharmaceuticals [1] - The strategic allocation value of the Hong Kong stock market is viewed positively as China’s asset revaluation enters a new phase [1] Group 2 - The Hang Seng ETF, tracking the Hang Seng Index, consists of large-cap, actively traded stocks with strong industry representation, covering financials, consumer discretionary, and information technology, which together account for nearly 80% of the index [2] - The Hang Seng China Enterprises Index, tracked by HIGETF, includes 50 large-cap, actively traded stocks from mainland China listed in Hong Kong, with consumer discretionary, financials, and information technology making up over 85% of the index [2] - The CSI Hong Kong Stock Connect China 100 Index comprises 100 large-cap, actively traded mainland Chinese companies, with consumer discretionary, information technology, and financial sectors accounting for nearly 75% of the index [2]

Market Overview - The Hong Kong stock market experienced a correction this week, with the Hang Seng Index declining by 3.5%, the Hang Seng China Enterprises Index down by 3.8%, and the CSI Hong Kong Stock Connect China 100 Index falling by 3.3% [1][3]. Fund Flows - Southbound funds were actively increasing their positions, with a total net purchase of nearly 60 billion yuan [1]. Index Performance - The rolling price-to-earnings (P/E) ratios for the indices are as follows: Hang Seng Index at 11.3 times, Hang Seng China Enterprises Index at 10.2 times, and CSI Hong Kong Stock Connect China 100 Index at 10.7 times [3]. - The rolling P/E ratio percentiles indicate that the Hang Seng Index is at 50.4%, the Hang Seng China Enterprises Index at 62.3%, and the CSI Hong Kong Stock Connect China 100 Index at 87.6% [3]. Sector Composition - The CSI Hong Kong Stock Connect China 100 Index comprises 100 large-cap and actively traded companies from mainland China, with financials, consumer discretionary, and information technology sectors accounting for over 65% of the index [6]. - The broader index sectors, including consumer discretionary, financials, information technology, and energy, collectively represent over 85% of the index [6]. Historical Performance - Year-to-date performance shows the Hang Seng Index up by 22.2%, the Hang Seng China Enterprises Index up by 20.8%, and the CSI Hong Kong Stock Connect China 100 Index up by 23.7% [7]. - Over the past year, the Hang Seng Index has increased by 44.6%, the Hang Seng China Enterprises Index by 47.4%, and the CSI Hong Kong Stock Connect China 100 Index by 49.9% [7].

Group 1 - Hong Kong stocks rebounded in the afternoon with southbound funds net buying over 12 billion HKD throughout the day [1] - The Hang Seng Index fell by 0.2%, while the Hang Seng China Enterprises Index decreased by 0.3%, and the CSI Hong Kong Stock Connect China 100 Index rose by 0.02% [1] Group 2 - The Hang Seng ETF managed by E Fund tracks the Hang Seng Index, which consists of large-cap, actively traded stocks with strong industry representation, covering financials, consumer discretionary, and information technology, accounting for nearly 80% of the index [2] - The Hang Seng China Enterprises Index, tracked by HIGETF, includes 50 large-cap, actively traded stocks from mainland China listed in Hong Kong, with consumer discretionary, financials, information technology, and energy sectors making up over 85% of the index [2] - The CSI Hong Kong Stock Connect China 100 Index, tracked by the Hong Kong Stock Connect 100 ETF, comprises 100 large-cap, actively traded mainland Chinese companies, with consumer discretionary, information technology, and financial sectors accounting for nearly 75% of the index [2]

Group 1 - Multiple Hong Kong-based broad-based ETFs continue to show strong performance, with the Hong Kong Stock Connect 100 ETF (159788) achieving two consecutive trading gains [1] - The Hong Kong National Enterprises ETF (513810), Hong Kong Stock Connect 50 ETF (159712), Hang Seng ETF Hong Kong Stock Connect (159312), and Hang Seng Hong Kong Stock Connect ETF (159318) all recorded increases of over 5% [1]