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]