Recently, Societe Generale Securities issued a research report saying that it is optimistic about the good opportunity for the allocation of high-quality central enterprises in Hong Kong. The agency pointed out that the low valuation of central enterprises in Hong Kong stocks and standard corporate governance are ushering in new opportunities for revaluation.

According to the data, a total of 107 central enterprise groups and subsidiaries are listed in Hong Kong stocks, accounting for about 17.5% of the market capitalization of Hong Kong stocks in circulation on the main board.

In 2021, the market of central enterprises of Hong Kong power operators was very exciting, which opened the prelude to the revaluation of central enterprises of Hong Kong stocks. In fact, although Hong Kong stocks suffered the impact of higher-than-expected industrial policy risk and credit risk last year, more than 70% of the central enterprises rose, while the decline of the companies was relatively small.

Societe Generale Securities saidThe value of the central enterprise is revalued, not because it is cheap or labeled by the central enterprise, but because of the change based on the fundamentals.

Medium and long termWith the implementation of the "double carbon" strategy, high-quality development and common prosperity, the fundamentals of some central enterprises in Hong Kong are ushering in opportunities for turnaround or transformation. These include:

1) low-carbon and environmentally friendly new energyPower operators with iterative technology and high prosperity; Fengguang, nuclear hydrogen and other new energy-related industrial chains; new energy infrastructure construction leaders with obvious advantages in the whole industry chain

2) TMT related to the Alliance of everythingProfit margin is expected to usher in improved telecom operators of central enterprises

3) high-quality central enterprises of Hong Kong stocks in the field of advanced manufacturing.

Medium and short termChina's economy is "stable" in 2022, and the Chinese economy is expected to stabilize and recover. Both A-shares and Hong Kong stocks will benefit from investment opportunities. These include:

1) the improvement of the industry boom brings about a revaluation.China's monetary and credit environment will be looser than that in 2021, and the pro-active fiscal policy will also work in structural and deterministic areas, optimistic about the average return of agriculture, construction, building materials, securities firms, aviation, environmental protection, telecom operators and other industries.

2) short-term "falling opportunities" for strategically bullish industriesThe long-term strategic opportunities such as green power, new energy and new infrastructure can be combined with short-term stable growth.

3) the real estate, financial and other "bond" assets of central enterprises are expected to fall deeply and rebound, and the "true value stocks" with improved fundamentals will usher in a good opportunity for medium-and long-term allocation.

The following picture shows some Hong Kong stock central enterprises and related subsidiaries in line with the current strategy proposed industry direction, for reference, not recommended as individual stocks.