Analysis and allocation Strategy of funds going South

The highest proportion of capital holdings in the south of Hong Kong stocks

The continuous bottoming of southward funds: mainly in the Internet industry.

• The Internet (media + social service) is the industry with the most funds to be raised in the south.Net sales of finance, automobiles, utilities and electronics.

  

There are more positive signals on the Internet.

• The regulatory framework of the Internet was basically established in 2021 and continued in 2022, not further stringent. Recently, from the meetings of the central government and ministries to the mediaMore positive signals have been released..

• Meeting of the Golden Stability Committee of the State Council:Promote the stable and healthy development of platform economy and improve international competitiveness.

• Economic Daily: "Market players and relevant parties can put aside their worries and continue to make good use of the international and domestic markets."Enhance the ability of innovation and development and empower economic transformation. "

• Central Internet Information Office: will provide health for the vast number of Internet enterprisesSustainable development provides a strong guarantee.

Why buy Hong Kong stocks?

Compared with A shares, the advantages of Hong Kong stocks are:

• The valuation level is significantly lower.

• The buyback craze of Chinese stocks

• The dividend yield is relatively high

The valuation of the market fell to an all-time low after the market stabilized.

At present, the absolute forward price-to-earnings ratio of the Hang Seng Index has returned to the level of the bottom periods such as the third quarter of 2018 and March 2020.The current valuation level of the index is already very attractive..

Which industries have supported the stability of the index so far this year?

• Since the beginning of the second quarter, macro and listed company data have returned to public view.The importance of fundamentals began to improve..

• Petroleum and petrochemical, automobiles and banks are the main industries supporting the Hang Seng Index's profit forecast so far this year.While social services, trade and retail, real estate and the media have obvious negative contributions.

Buyback can be expected after the results are released.

• The number and amount of repurchase companies in the Hong Kong stock market are rising rapidly, highlighting the view of industrial capital represented by listed companies.The share price of one's own company is quite undervalued..

• Considering that the current valuation levels of almost all industries in Hong Kong stocks are quite attractive, we believe thatBuybacks are available at the end of this year's annual reporting season..

The defensive value of high dividend

• Hong Kong stockStable and high dividendThe companies are mainly distributed in the banking, public utilities, communications, raw materials and Hong Kong real estate sectors.

• Take the Hang Seng High dividend Index as an example, the current dividend yield is 6.5%The spread over US Treasury yields remains at more than 400 basis points..In a weak market, the dividend yield is equal toAllocation valueIt has more reference significance.

• Dividend income from individual stocks with high dividends provides investorsStable return.

High-interest blue chip "earn interest and earn price"

What do you buy? In terms of stock selection, it is recommended to combine:

• A-share scarce and unique companies

• There is a greater discount than A shares.Stock price is highly sensitive to Beishui.

• The holding degree of North Water is high.

• Shares with a representative transaction amount

There is a greater discount than A shares.