20231010-浙商国际金融控股-港股市场策略周报_16页_1mb

Summary of Hong Kong Stock Market Strategy Weekly Report

The report covers market performance, valuation, fundamentals, fund flow, and outlook for the Hong Kong stock market, based on the provided data.

Key points from the market review:

• Hong Kong stocks weakened further this week, with the Hang Seng Composite Index down by 18.4%, Hang Seng Index by 18.2%, and Hang Seng Tech Index by 26.6%. The large-cap growth style performed relatively well despite the market weakness.
• All industry sectors declined, with energy and materials leading the losses, while financials and consumer staples showed the least drop.

Valuation analysis shows:

• The Hang Seng Composite Index remains undervalued, with its 5-year PE (TTM) valuation percentile declining to 19.59%.
• Risk premium rose to 56.8 due to high US Treasury yields, indicating reduced attractiveness compared to US bonds.

Fundamental outlook is positive:

• Economic recovery gains strength, supported by holiday data showing increased travel and consumption, with domestic tourism revenue growing significantly.
• Policies remain supportive, and IPOs are expected to stay slow in the coming quarters.

Fund flow is under pressure:

• High US Treasury yields and mixed US employment data continue to weigh on Hong Kong funds, limiting short-term inflows.

Looking ahead and suggesting strategies:

• The primary issue is fund flow pressure combined with negative sentiment, hindering market performance.
• Continue with a diversified portfolio, focusing on sectors like consumption, banking, insurance, and TMT for policy benefits; core consumption, healthcare, and internet for sensitivity to improving fund conditions; and high-growth areas like gold, electronics, electric vehicles, pharmaceuticals, and travel due to their improving prospects.