2021 was a "lost" year for Hong Kong stocks, with the Hang Seng Index closing down 14% for the whole year, ranking last in the world's major markets. However, there was a small rebound in Hong Kong stocks in 2022, with the Hang Seng index rising 5.5 per cent against the backdrop of dismal performance of A shares.

Is there an opportunity for Hong Kong stocks in the valuation depression to "overfall and rebound"? How strong is the persistence? Which sectors or industries are better in the future?

A reporter from China Fund News interviewed for this purpose.Zhang Jintao, director of value style investment, managing director of Castrol fund,Xia Haoyang, Manager of Guangfa China Interconnection ETF Fund,Yang Tao, Boshi Greater China Asia Pacific Select Stock QDII Fund,Zhan Jia, Director of International Business Department of Prudential, Everbright,Qu Shaojie, Assistant to the General Manager of the International Business Department of the Great Wall Fund,Li Zhiwu, growth fund manager of Chuangjin Hexin Hong Kong Stock Connect,Jiang Junchen, a selected mixed fund manager for former Hang Seng Harbour Stock Exchange.

These fund managers believe that Hong Kong stocks "bottomed out" at the beginning of the year under positive factors such as the expected tightening of overseas liquidity being digested by the market, good economic growth prospects in major economies, and a rise in US listed Chinese stocks. This rebound may be sustainable, and the opportunities for Hong Kong stocks in 2022 should be greater than in 2021, and areas such as science and technology and pharmaceuticals are optimistic.

A number of factors have triggered a "bottom rebound" of Hong Kong stocks.

China Fund News reporter: Hong Kong stocks have rebounded slightly since 2022. What do you think of this rebound? what factors caused it? Is the follow-up continuous strong?

Xia Haoyang:Hong Kong stocks and some US-listed Chinese stocks plummeted in 2021. The main reasons are as follows: first, under the influence of multiple factors such as the impact of COVID-19 's epidemic situation and strategic adjustment, the performance of some companies has declined seriously.

Second, the explosion of highly leveraged overseas funds with heavy holdings of Chinese stocks, causing a decline in Chinese stocks; third, investor sentiment is affected by various factors, and the market expectations for the future trend of technology giants have changed.

The recent market rebound is mainly due to the expectation of tighter overseas liquidity being digested by the market and the stimulation of positive factors such as better economic growth prospects in major economies. In the future, we believe that Hong Kong stocks and US stock technology sectors will enter a performance-led period, and the relevant sectors will enter a new stage where the rebound will be mainly driven by performance.

Zhang Jintao:In 2021, Hong Kong stocks also fell more thoroughly when the market mood was not optimistic. But if the fundamentals are reversed, the upward elasticity is also very large. Today's Hong Kong stocks stretch for a long time, corporate earnings and stock prices match. It is expected that the earnings of some Hong Kong stocks in 2022 are expected to be low before high, which may mean some opportunities.

It is estimated that if there is no big external factor disturbance in 2022, the growth rate of corporate performance may still be between 5% and 10%. Some industries and individual stocks may exceed expectations, because there will be temporary problems in the supply chain of many industries in 2021, such as lack of core in the automobile and mobile phone industry chain. If these factors can be alleviated, the profits of many companies can be improved quickly.

Therefore, the profit in 2022 is more certain to see positive growth, the growth rate is likely to be low in the first and then higher.

Li Zhiwu:The rebound in Hong Kong stocks at the beginning of the year was triggered by a sharp rebound by Internet companies, while the opportunity lies in the collective rise of US-listed Chinese stocks overnight. The share price of Internet companies fell sharply in 2021 under the dual suppression of industry regulatory policies and US regulatory measures. although this constraint is still difficult to eliminate in 2022, the marginal impact on stock prices may be alleviated to a large extent. therefore, there is expected to be a certain degree of rebound in 2022, with a certain degree of continuity.

Zhan Jia:The recent rebound in Hong Kong stocks is mainly due to the accelerated pace of monetary policy adjustment in the United States in recent months, whether it is raising interest rates or reducing the pace of buying bonds and shrinking tables. Under this influence, global stock markets are switching between high and low valuations, while Hong Kong stocks are relatively low-valued in the world, so they are relatively beneficial in this environment.

In terms of the persistence of the rebound, I think it remains to be seen. On the one hand, no matter whether they are Internet heavyweights, Chinese bank stocks, or some other large state-owned enterprise stocks, most of their underlying assets are denominated in RMB, and now there is actually some pressure on the exchange rate of the personal currency.

Qu Shaojie:Securities market participants are prone to polarization, excessive pessimism in pessimism and over-optimism in optimism. In fact, it is most reasonable to pay attention to the investment intermediate state of fundamentals, but the market will always overreact. The performance of Hong Kong stocks in 2021 is the worst among the major securities markets in the world. There must be fundamental factors, and the overreaction is also obvious.

In 2022, after the excessive release of risk, I tend to think that Hong Kong stocks will recover moderately throughout the year, first of all, Hong Kong stocks have the momentum to rebound to fill the valuation bottom brought about by the excessive decline. the second is the mild upswing brought about by calming down and focusing more attention on good companies looking for solid growth.

Yang Tao:The main reasons for this strong rebound in Hong Kong stocks are as follows: first, at the trading level, the Hong Kong stock market in 2021 is severely oversold, with an overall valuation of only about 10 times. Overseas funds have begun to make bottoms one after another before the festival.

Second, at the policy level, the Central Economic work Conference at the end of 2021 set the main tone of "steady growth", and the financing policy of the real estate sector released warming signals; and recently, the Central Government issued the "14th five-year Plan for Digital Economic Development", which will benefit the Internet sector in the long run. And these two major plates are also heavy plates of Hong Kong equity. The positive signals on the policy side have eased the pessimism in the market.

Third, the level of listed companies: recently, leading Hong Kong stock companies have launched buybacks, and the repurchase price is generally higher than the current price, which shows that Hong Kong stocks have fallen out of value and the market is on the brink of rebound.

The rebound of Hong Kong stocks has been sustained to a certain extent, mainly based on: first, the strong momentum of valuation repair in traditional industries such as finance and real estate; second, oil and other commodity prices continue to rise, and the corresponding stocks will perform well; third, southward capital has continued to net inflow into the Hong Kong stock market since the beginning of the year, and marginal increments have supported the strength of the Hong Kong stock market in the short term. However, whether the recent rebound can further evolve into a reversal, we still need to pay close attention to the following annual reports of Hong Kong listed companies.

Because the Hong Kong stock market is still an institution-led mature market, and the performance is the apparent data most valued by Hong Kong institutional investors, we still need to closely follow the follow-up trend of the Hong Kong stock market.

Jiang Junchen:We see that the Hong Kong stock market stabilizes at the beginning of 2022. In this process, the early stage mainly relies on low-valued financial and cyclical plates to stabilize the market. At this stage, funds tend to look for sectors with relatively high certainty and risk aversion.

In the later stage, as the Fed Chairman's statement on the extent of US inflation and interest rate increase this year was in line with market consensus expectations, and did not make any statement on speeding up the pace of policy adjustment, the market's concern about the Fed's premature shift in monetary policy was alleviated, liquidity risk was also released to a certain extent, and funds flowed back into growth sectors, driving TMT, cars, medicine and other sectors to strengthen collectively.

Another common denominator is that valuations of Hong Kong stocks have become more attractive after a sharp adjustment over the past year, although the tightening of monetary policy by the Federal Reserve this year may put pressure on capital inflows into Asian markets. however, the low valuation of the Hong Kong stock market as a whole and the relative abundance of domestic liquidity to support the economic stabilization and recovery are the main catalysts for its good performance.

However, on the whole, at present, Hong Kong stocks will still be affected by uncertain factors such as domestic economy and policy, overseas news, liquidity, epidemic situation and investor confidence, and it still takes time to digest. Hong Kong stocks are expected to maintain a volatile market, and the rotation between sectors will also continue.

There are more structural opportunities for Hong Kong stocks in 2022 than in 2021.

China Fund News reporter: what do you think of the investment opportunities for Hong Kong stocks in 2022 and what are the main factors affecting the market?

Xia Haoyang:At present, the Hong Kong stock market has gradually entered the performance and macroeconomic dominant period from the previous mood correction period, and the momentum of future stock prices will depend on the progress of performance recovery and the macroeconomic environment. It is expected that the performance of some leading technology companies will be low before and then high in 2022, the second half of the year may be better, and share prices may be reflected in advance.

Zhang Jintao:I am not pessimistic about Hong Kong stocks in 2022. There are more structural opportunities than in 2021.

The follow-up trend of Hong Kong stocks mainly depends on two major elements: one is the profits related to the economy, and the other is how the capital will go. The opportunity for Hong Kong stocks in 2022 is expected to be a structural opportunity to recover after stabilizing from low levels, with more opportunities for individual stocks. In terms of large capital flows, the current domestic stable economic policy is strong, and monetary policy is expected to be further loosened in the future. Foreign capital is likely to flow into Hong Kong stocks in 2022.

In addition, the phase of intensive regulatory measures may be over. In this context, the impact on the market may also be gradually alleviated. Macro policy has shown signs of fine-tuning, and the macro-economy is expected to stabilize in the second half of 2022. The policy determination in 2021 is very strong, reflecting the government's determination to promote economic restructuring and high-quality and sustainable development. At the same time, because the policy in 2021 is very restrained, the policy means in 2022 are relatively abundant.

Zhan Jia:From the perspective of the first half of the year, the main opportunities for Hong Kong stocks in 2022 are mainly from the bottom up. The main pricing of Hong Kong stocks is greatly influenced by foreign capital, and a large number of foreign capital flows into Hong Kong stocks, which needs the signal that the RMB exchange rate is bottoming out. Judging from the current situation, the US dollar may raise interest rates this year, while domestic monetary policy may develop in the direction of easing. Accordingly, the RMB exchange rate is under pressure. When the RMB exchange rate is under pressure, it is necessary to lower the expectation of index-level returns.

Li Zhiwu:Relatively optimistic about the Hong Kong stock market in 2022, that there will be a better rebound. The main factors include: first, the negative side gradually alleviated. Hong Kong stocks have been hit by multiple heavyweight bearishness in recent years, such as the customs closure caused by the epidemic, the regulation of Internet leaders, the credit risk exposure of real estate blocks, and so on, all of which will be gradually alleviated in 2022.

Second, it is good to expect gradually. A new Chief Executive will be elected in 2022, and the local environment tends to be stable. in addition, 2022 is the 25th anniversary of Hong Kong's return to the motherland, and the central government is expected to continue to introduce relevant measures to support Hong Kong's development. it is conducive to maintaining and consolidating Hong Kong's status as an international financial center and integrating into the Greater Bay area, so as to lay a good foundation for Hong Kong's sustainable development.

Third, the process of raising interest rates in the United States may cause disturbance. If there is a higher-than-expected increase in interest rates in the United States or the process is accelerated, it may lead to increased market volatility.

Qu Shaojie:There is a big difference between 2022 and 2021. The over-optimistic results at the beginning of 2021 lead to a series of negative results in each quarter. In 2022, I judge that the early market remains cautious and gradually calms down.

There are healthy market opportunities in the process of gradual relief of risk anxiety. 1) valuation repair brought about by the easing of market panic; 2) the overall valuation of the industry and companies represented by technology Internet companies is low, and the head platform is more attractive to the valuation of US technology giant PEG, especially for long-term funds; 3) southbound funds have begun to gradually increase their positions since December 2021; and 4) the performance of leading enterprises is stable. 5) the SFC has improved the overseas listing system, and the HKEx has optimized the secondary listing and dual major listings. It is expected that more of them will return to Hong Kong in the future.

Yang Tao:We tend to shock upward trend in the Hong Kong stock market in 2022, mainly as follows: first, in the context of steady growth, relevant support policies have been introduced one after another, and the valuation repair trend of the real estate and Internet sectors has not changed; second, the fundamentals: in the United States, Chinese stocks have accelerated their return to Hong Kong stocks, and the new economy unicorn has turned to landing Hong Kong stocks IPO, which will enrich the quality targets in the Hong Kong stock market and attract long-term capital. Third, on the capital side, domestic monetary policy as a whole is structurally loose and liquidity margins are relaxed this year, but interest rate hikes and shrinking tables under the US taper have led to a shortage of overseas funds, which is reflected in the trend of volatility in the market. On the whole, we are happy to see the trend of Hong Kong stocks and investment opportunities in the past 22 years.

Jiang Junchen:After more than a year of adjustment, the valuation of Hong Kong stocks is relatively low in history, the valuation advantage is obvious, the performance-to-price ratio of investment has been more prominent, and the multiple disturbance factors that have plagued Hong Kong stocks in the early stage have a marginal trend of improvement. however, it is still seriously affected by external uncertain factors in the short term, and it is expected that Hong Kong stocks will be in the stage of "grinding the bottom" and stabilizing. From a long-term point of view, once the uncertainty falls to the ground, the unique leading enterprises in the new economy still have a strong attraction.

We focus on three main factors affecting the Hong Kong stock market this year: first, the actual impact of the tightening of overseas liquidity on the Hong Kong stock market; second, the stabilization and recovery of the domestic economy; and third, whether some sectors with greater weights in Hong Kong stocks are subject to strong regulatory pressure and whether they will be improved marginally in 2022. Judging from the current situation, we expect that these three factors are expected to continue to develop in a good direction.

Be optimistic about big consumption, new energy, science and technology, medicine, etc.

China Fund News reporter: in the field of Hong Kong stocks, which sectors or industries do you prefer in 2022?

Xia Haoyang:I personally pay more attention to the Internet plate, looking to the long-term future, the interconnection plate may continue to benefit from the following aspects: first, the Internet giants open up each other, and the opening of traffic is conducive to the innovation and sustainable development of the industry; second, the continuous increase in 5G penetration brings new business and growth points to the Internet industry; third, the rise of meta-universe may become the next stage of the development of the Internet. Fourth, the internationalization strategy of Chinese companies is conducive to opening the boundaries of performance and valuation.

Zhang Jintao:Our favorite sectors in 2022 include big consumption, manufacturing, energy, science and technology, Internet, financial and real estate industry chain and so on. The bottom variety in the combination construction may be more likely to be found in the big consumption, interspersed with medicine. The second is advanced manufacturing.

Manufacturing is the future of China's economy, it is the support of the real economy, the Internet, finance, including consumption are the final results of economic growth, which is also related to the whole path of development in China. At present, China's manufacturing industry is a globally competitive industry, like many new energy enterprises have international competitiveness, in the future will continue to look for Alpha in this field.

Zhan Jia:If you are optimistic about the plate, there are mainly several aspects: first, it is necessary to choose consumption. From a historical point of view, Hong Kong stock consumer goods have better resilience when the economy is in recession. Second, the pro-cyclical plate, Hong Kong stocks in the pro-cyclical plate is still relatively large, the current monetary policy has been relaxed at the margin, with the steady economic growth gradually effective, pro-cyclical plate allocation value highlights.

Qu Shaojie:The valuation of Chinese science and technology Internet enterprises has regained its long-term allocation value after a year of risk release. Energy reform, as a long-term process, will benefit the new energy vehicle sector and wind power photovoltaic sector for a long time. Hong Kong stocks' traditional strengths such as consumption, medicine, technology and so on can also be expected to be more optimistic under the tone of steady growth.

Yang Tao:Divided into two time dimensions, we are more optimistic about the value sector in the first half of the year: including banks, securities firms, real estate supported by performance, property management plate and related sectors related to commodity prices. In the second half of the year, we are more optimistic about the growth sector, and the core assets of Hong Kong stocks are still in the growth sector. fine molecular industries such as leading enterprises with solid performance on Internet platforms, new energy industry chains (upstream assets and mid-stream manufacturers), and biotechnology companies with performance support or product pipelines. However, the core of Hong Kong stock investment is to look at the company's performance from the bottom up, so we will select the stocks that match the company's performance valuation.

Li Zhiwu:In 2022, we are optimistic about the rebound of the overall market, specific sectors: first, the unbroken logic of overfall, such as technology and consumer sectors, fell sharply in 2021, and the logic of growth has not been destroyed. sectors that fall purely because of valuation deserve special attention.

Second, the carbon peak and the long-term investment opportunities under the carbon-neutral national policy. Double carbon is a long-term national policy, an important starting point for the transformation and upgrading of China's economic structure, and a long-term deterministic growth opportunity.

Third, pay attention to the new innovative biomedical companies. Hong Kong Biopharmaceutical Board has listed many new shares one after another, and the stock price has fallen to a large extent due to the drag of the market in 2021. With the gradual repair of the market, companies with core innovation capabilities are expected to get a reasonable valuation.

Jiang Junchen:Looking forward to 2022, we believe that the main tone of policy will be stable, but the uncertainties caused by the recent epidemic will still affect the good recovery of the economy to a large extent in the first quarter or even the first half of the year. However, as the epidemic is further brought under control and structural stimulus policies may be introduced after the economic downturn, economic performance is expected to stabilize and rebound in the second half of the year.

Promising sectors in 2022: first, new energy industry chain (green power and energy storage): to achieve the goal of "double carbon", China will vigorously develop new energy to replace traditional energy generation, so as to reduce carbon emissions. this trend will promote the development of the new energy industry and form a long-term good investment racetrack, some Hong Kong stock hydrogen energy and energy storage related companies still have the advantages of high prosperity and low valuation.

Second, science and technology, medicine, Internet and other growth sectors: the valuation of growth stocks has been adjusted to a certain extent, and in the medium to long term, companies with core competitiveness are expected to continue to bring excess returns to investors. there is huge room for the development of sub-industries such as hard technology, biomedicine and Internet.

Third, daily consumption sector: public spending power is expected to stabilize from the second quarter of 2022. Superimposed PPI will gradually fall under the high base, and the scissors gap between CPI and PPI is expected to be repaired, which is relatively optimistic about daily consumer stocks with strong mass consumption attributes and the ability to raise prices.

A shares compete in the Hong Kong stock market:All have structural opportunities.

China Fund News reporter: compared with A shares and Hong Kong stocks, which market do you think has more opportunities in 2022?

Xia Haoyang:Both A shares and Hong Kong stocks may present a structural market, in which sub-sectors or stocks whose performance can match valuations may remain strong, while sectors that have reversed difficulties are mainly looking forward to a recovery caused by the weakening impact of the epidemic.

Zhang Jintao:The situation of Hong Kong stocks may be better in 2022, mainly because Hong Kong stocks are currently in a relatively low position and many "cheap" stocks can be found. But share prices cannot rise for no reason and need to be catalyzed by fundamentals, such as an improvement in corporate earnings, which are premised on macroeconomic stabilization.

The current policy begins to stabilize the economy, first of all, monetary policy will be relatively loose, there may be a greater credit release in the first quarter of 2022, M2 growth should be relatively fast. The second is valuation. Compared with 2017, Hong Kong stocks are down 20%, while Shanghai and Shenzhen 300 are up 25%. Hong Kong stocks are now in a low position, although PE is not at a historical low, but PB is already a very low position. Corporate profits are expected to stabilize gradually in the first half of 2022.

Zhan Jia:Compared with A shares, the valuation of Hong Kong stocks is relatively low and the margin of safety is relatively good. Whether Hong Kong stocks can rise in 2022 mainly depends on the situation of positive catalysts, such as corporate profits, economic stabilization, and so on. Hong Kong stocks may rebound. By contrast, the overall valuation of A shares may not be so high, but there are many A-share industry plates and various subdivision tracks of the partial new economy. Generally speaking, there are many opportunities for individual shares, and this investment opportunity is better than that of Hong Kong stocks.

Qu Shaojie:According to the development direction of China's economic work in 2022, A shares and Hong Kong stocks play the same role in representing China's economic development, with structural investment opportunities respectively. stocks with excellent performance and reasonable valuation have long-term investment value.

Yang Tao:Both markets are structural opportunities. Due to the relationship between the structure of listed companies in the two markets, the investment level is mapped to each other, there are more A-share hard-tech companies, and the business model of Hong Kong companies is better. Under the influence of southward funds since 2021, the A-shareholding of Hong Kong stocks has opened up investment opportunities for A-shares and Hong Kong stocks through industry leadership.

In the short term, Hong Kong stocks will outperform A shares, mainly because Hong Kong stocks have overfallen and rebounded, and A shares have risen a lot in the early days and need to adjust and rest. However, in the dimension of the whole year, both A-shares and Hong Kong stocks have structural opportunities, and the core is to grasp the differential characteristics of the two markets. The sub-sectors under the large technology sector of A-shares and the leading companies with supporting performance in the core assets of Hong Kong stocks can all generate income.

Li Zhiwu:From a relative point of view, we are more optimistic about the excess returns of Hong Kong stocks: (1) in the past 1-2 years, Hong Kong stocks have been more suppressed, and core sectors such as Hong Kong local stocks, Internet, consumption and other industries have been greatly affected, and the marginal impact in 2022 will be weakened. with greater flexibility (2) Hong Kong stocks have outperformed A shares for three consecutive years. Taking the Hang Seng Index and Shanghai Composite Index as examples, the Hang Seng Index in 2019, 2020 and 2021 outperformed the Shanghai Stock Exchange by 12, 17 and 19 percentage points respectively, which is the first time in 20 years. From a high probability point of view, Hong Kong stocks are expected to reverse this situation in 2022 and Hong Kong stocks are expected to have positive excess returns.

Jiang Junchen:Both A shares and Hong Kong stocks have structural investment opportunities in 2022, while Hong Kong stocks have relatively outstanding valuation advantages and scarce target advantages. we are full of confidence in the medium-and long-term development prospects of Hong Kong stocks. After the adjustment in the early stage and even over the past few years, the bearish position of Hong Kong stocks has basically been greatly released. We see that the weight plate has been basically adjusted, and the range of adjustment is relatively large, the valuation is also at a low level, relatively speaking, there is a certain margin of safety. Many industries and individual stocks have significant investment value, that is, the growth rate, growth is good, and the valuation is low.

Based on a long-term logical judgment, we are optimistic about the Hong Kong stock market for a long time, and we still have confidence in some industries and individual stocks. Implement in 2022, look for opportunities in the overfallen sectors, standing in the cycle of one or two years, the opportunities far outweigh the risks, the current low is also a better opportunity for the left layout of Hong Kong stocks. At the same time, the correlation between A shares and Hong Kong stocks is low, reasonable asset allocation can effectively reduce portfolio risk and improve portfolio returns. Hong Kong stocks are an indispensable part of asset allocation.

Hong Kong stock valuations are at historically low levelsTo see the opportunity, we should also pay attention to the "undervaluation trap".

China Fund News reporter: Hong Kong stocks have always been known as "investment depressions". What is the current valuation state of Hong Kong stocks? What do you think of this valuation level?

Xia Haoyang:As of January 13, 2022, the valuations of the major indexes of Hong Kong stocks were relatively low in history, with the Hang Seng Technology Index trading at 36.16 times earnings, which is 26.37% of the historical quantile value since August 2020. Combined with the high performance growth of its constituent stocks, the current investment performance-to-price ratio of the index may be relatively high.

Zhan Jia:At present, the valuation of Hong Kong stocks is relatively low, and I personally think that the whole is still more cost-effective.

Yang Tao:The overall valuation of the Hong Kong stock market is about 10 times. If we only use static indicators to look at Hong Kong stocks, it is not too much to say that Hong Kong stocks are "value depressions". Hong Kong stocks have undergone great changes in their structure in the past three years under the guidance of the IPO New deal. The overall valuation of the Hang Seng Technology sector, which represents the new economy plate, is about 36 times, just as we can see that A shares cannot simply be analyzed by the broad base index of Shanghai and Shenzhen 300.

The most taboo of investment is the "value trap". There is a reason why it is cheap. On the one hand, we should pay attention to the market structure, on the other hand, we pay more attention to the industrial prosperity and trend under the influence of macro policies, and finally look at whether the valuation of the market and the company is reasonable, rather than looking at a certain index statically.

Zhang Jintao:At present, the Hang Seng Index TTM-PE has been at the level below the historical center, and the AH premium has returned to the 15-year level. Historically, valuation repairs have usually led earnings to rebound. Although earnings growth in 2021 is lower than expected at the beginning of the year, it is still in the recovery of growth after the epidemic, while the Hang Seng Index 2021 experienced a single-digit decline for the whole year, and valuations fell further.

Share prices have actually taken the lead in trading stagflation and recession, further highlighting the attractiveness of valuations. In fact, there are some opportunities for value and growth in 2022. The valuations of Hong Kong stocks are already at historic lows, and there is little risk of falling in the future. The key lies in stock selection.

Qu Shaojie:As an offshore market for the international valuation of Chinese enterprises, it is normal and reasonable for Hong Kong stocks to be undervalued. From the valuation level, after a year of valuation decline, the current valuation level has been significantly lower than the center of their past low valuations. The valuation performance of the Hang Seng Index Pram E has been lower than the 10-year average by a standard deviation, which has a stronger valuation advantage compared with the CSI 300 index and the S & P 500 index Pram E over the 10-year average.

Li Zhiwu:As of January 14, 2022, Hong Kong stocks had a dynamic price-to-earnings ratio of about 11.3 times, compared with the average of 12.8 times over the past 20 years, the current valuation is in the lower-middle range, with a large margin of safety.

Jiang Junchen:Even after nearly a week of sharp rebound, the PE (TTM) of the Hang Seng Index is only about 11 times, and the valuation is still significantly lower than the average of 12.77 and the median level of 12.39 over the past two decades.

From the vertical data, every time the valuation of the Hang Seng Index is close to 10 times, it is basically at the relative bottom. At present, the Hong Kong stock market may not be far from the bottom, and the valuation advantage of Hong Kong stocks is already more prominent. It has investment value in the long run.