On January 20, the main index of Hong Kong stocks rose sharply, extending the rebound momentum since the New year. The performance of Hong Kong stocks since 2022 is the same as the strong market in early 2021.

Public offerings said that the rebound in Hong Kong stocks is supported by three major factors: valuation, capital and performance. The investment of Hong Kong stocks in 2022 should pay attention to two key factors: one is how to better integrate the expected factors into the idea of stock selection, and the other is whether international institutional investors will continue to strengthen Hong Kong stocks in the liquidity environment of "tight outside and loose inside".

Enter a performance-oriented period

Both the Hang Seng Index and the Hang Seng China Enterprises Index have risen more than 6 per cent since 2022, compared with 14.08 per cent and 23.30 per cent respectively for the whole of 2021, according to Wind. In terms of sectors, insurance, energy, banking, retail and other sectors have risen more than 7% since the New year.

Boshi Greater China Asia Pacific Select QDII Fund Yang Tao said that Hong Kong stocks have rebounded since the New year for the following three reasons: first, the trading level. In 2021, the Hong Kong stock market was oppressed by both mood and environment, and it was seriously oversold. The average price-to-earnings ratio dropped to about 10 times. Recently, international funds began to bottom out one after another. Second, in the main tone of steady growth, real estate sector financing released a warming signal, the Internet sector also benefited from changes in the news side.

These two major sectors are the weight of Hong Kong stocks, under the positive signal, the market pessimism has eased. Third, recently, leading Hong Kong stock companies have launched buybacks, and the repurchase price is generally higher than the current price, indicating that Hong Kong stocks have fallen out of value.

"the recent rebound in Hong Kong stocks is mainly due to the fact that expectations of tighter global liquidity have been digested by the market, with better prospects for economic growth in major economies. In the future, we believe that Hong Kong stocks will enter a performance-oriented period, and the relevant sectors will enter a new stage in which the rebound will be mainly driven by performance. Xia Haoyang, manager of Guangfa Interconnection ETF Fund, believes that.

Liquidity environment "tight on the outside and loose on the inside"

"A good grasp of expectations to deal with problems is the key to a good investment in Hong Kong stocks. Li Bei (a pseudonym), an equity fund manager, said bluntly that as early as the beginning of 2021, the industry had high expectations for Hong Kong stocks.

But then the market environment changed sharply, which led to the unsatisfactory market situation of Hong Kong stocks in 2021. Standing in early 2022, there are two key issues in Hong Kong stock investment: one is how to better integrate the expected factors into the stock selection train of thought; the other is in the liquidity environment of the Federal Reserve raising interest rates and the people's Bank of China cutting interest rates. Whether the international mainstream institutional investors will continue to strengthen Hong Kong stocks.

Li Zhiwu, manager of the Chuangjin Hexin Hong Kong Stock Connect growth Fund, said bluntly that how to overcome the investment logic and stock selection ideas of the past few years or even a decade, and reflect on the path dependence under extreme market performance, is a problem facing investors in 2022.

For Hong Kong stock investment in 2022, we need to pay more attention to the understanding and grasp of the policy environment, analyze whether it is a short-term or long-term factor, and constantly adjust the crowded tracks or individual stocks to ensure the marginal fitness of its safety.

Yang Tao believes that this wave of rebound in Hong Kong stocks has been sustained to a certain extent. Southbound funds have continued to flow into the Hong Kong stock market since the beginning of the year, and marginal increments support the short-term strength of the Hong Kong stock market. 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.

Li Bei believes that in the liquidity environment of "tight on the outside and loose on the inside", foreign institutions may not be completely optimistic about the Hong Kong stock market. But at the same time, in the context of China's sustained economic recovery, the performance-to-price ratio of Hong Kong stocks in the global market will continue to be prominent. Therefore, the attitude of foreign investors towards Hong Kong stocks will be better than that in 2021, and the opportunities for Hong Kong stocks in 2022 are worth looking forward to.

Five opportunities for layout

In terms of specific layout, China Merchants Fund said bluntly that Hong Kong Chinese stocks have high profit certainty and obvious valuation advantages, and are optimistic about the new economic sectors with asset scarcity in Hong Kong stocks, as well as those sectors that benefit from the return of Chinese-listed stocks.

Qu Shaojie, assistant general manager of the International Business Department of the Great Wall Fund, told the China Securities News that investment opportunities for Hong Kong stocks in 2022 include the following five aspects:

First, the opportunity to repair valuation brought about by the easing of market panic; second, the overall valuation of the industry and companies represented by technology Internet companies is low, and the PEG valuation of the head company relative to the US technology giants is more attractive; third, southbound funds have gradually begun to increase positions since December 2021; fourth, the performance of leading companies is stable; fifth, the listing system continues to optimize, and it is expected that more Chinese stocks will be listed in Hong Kong in the future.

Li Zhiwu said that Hong Kong stock investment in 2022 will focus on the following three areas: first, sectors that fall purely because of killing valuations, such as technology and consumer sectors, deserve special attention.

Secondly, pay attention to the long-term investment opportunities under the background of carbon peak and carbon neutralization. The goal of "double carbon" is an important starting point for the transformation and upgrading of China's economic structure, and it has long-term deterministic growth opportunities.

Finally, focus on innovative biomedical companies. The Hong Kong stock biomedical sector has listed many new shares one after another, and the stock price has fallen sharply due to the drag of the big market in 2021. With the gradual repair of the market, companies with core innovation capabilities are expected to get a reasonable valuation.

Qu Shaojie said that most of the participants in the Hong Kong stock market are institutional investors, and investment strategies tend to choose stocks from fundamentals and hold them for a long time, so large-cap stocks tend to be more robust than small-cap stocks and are more favored by institutional investors. individual investors should invest indirectly through investment funds as far as possible.

Wind data show that, as of January 20, there are 16 Hong Kong stock-related funds in the market, most of which are passive index funds that track hot tracks such as technology, consumption and medicine, such as China Merchants China Securities Hong Kong Science and Technology ETF, Boshi China Securities Hong Kong Stock Connect consumption theme ETF, Yinhua China Securities Hong Kong Stock Connect Medicine and Health Integrated ETF, and so on.