CICC's Hong Kong stocks strategy report stated that the Hong Kong market fell again last week, and has fallen nearly 10% from its peak. Since mid-April, the market's upward trend has mainly been driven by improvements in fund flows and risk preferences. In the absence of significant changes in the fundamentals, this nature of the fund and rebound-driving characteristics will cause the market to face certain profit-taking pressure after a short-term overbought situation. Therefore, the bank has been reminding investors since the beginning of May that the market is approaching the first-stage target point, which is around 19,000 to 20,000 points of the Hang Seng Index, corresponding to a risk premium falling to the level of the market high point at the beginning of 2023. The bank believes that if there is no further impetus from a decline in risk-free interest rates and a significant improvement in earnings, the market will face certain profit-taking pressure. Since mid-May, the market trend has also seen a correction as the bank expected, but CICC believes that unless extreme situations occur, the market will not give back all of its gains, as policy marginal changes, overseas fund inflows, and valuation repairs are all real improvements. The bank previously judged that as the market gradually returns to reality and fundamentals, it may oscillate and consolidate near 18,000 points of the Hang Seng Index, waiting for more new catalysts, which has once again been confirmed by last week's market performance.