The downward trend was affected by the superposition of multiple factors from 2021 to early October 2022. Since October this year, due to the improvement of overseas liquidity environment and frequent positive domestic policies, the Hang Seng Science and Technology Index has ushered in a strong rebound.

Overall, from early 2022 to early October, despite the downward trend of the Hang Seng Technology Index affected by multiple factors, southward capital (Hong Kong Stock Connect) still had a net outflow on only a few trading days. After October 2022, the trend of mainland capital allocation of Hong Kong stocks rebounded.

Everbright Securities believes that market sentiment has been significantly boosted by the improvement of the overseas liquidity environment and the frequent occurrence of favorable domestic policies.At present, the Hong Kong stock technology sector has entered the stage of valuation repair, waiting for the double-click market brought about by the improvement in fundamentals. From a specific industry point of view:

Consumer Electronics: focus on the growth of smart cars, AR/VR and other emerging areas

Everbright Securities said that smartphones as a whole are still in a downward cycle, there is little mobile phone innovation in the post-5G era, the competitive characteristics of the stock of major brands are more obvious, and the structural growth opportunities of upstream supply chain manufacturers mainly come from customer expansion, focusing on recovery opportunities in 2023.

In recent years, the process of smartphone innovation has slowed down, and the driving force for the rapid growth of the industry through smartphone innovation has become increasingly weak. In the medium and long term, with the continuous improvement of automobile intelligent penetration and the upstream growth rate of VR/AR industry, the upstream and downstream applications of electronic components industry chain will spread from a single smartphone to smart cars, AR/VR and other diversified fields, electronic hardware companies will take this opportunity to break the ceiling of mobile phone business and meet a new round of opportunities for overall growth of the industry.

Focus on the expansion of emerging areas such as smart cars and VR/AR to drive the growth line of deterministic sustained growth.Recommend$BYD ELECTRONIC (00285.HK)$It is recommended to pay attention to$SUNNY OPTICAL (02382.HK)$、$AAC TECH (02018.HK)$、$BOE VARITRONIX (00710.HK)$。

2. Semiconductors: focus on domestic substitutes for beneficiary targets, and pay attention to the inflection point of semiconductor downlink cycle

In 2022, the downstream demand of the semiconductor market is divided, and the downstream consumer electronics, PC, communications and other areas are declining, especially mobile phones and low-end consumer goods are currently in high inventory.

The agency believes that the performance of the semiconductor market is still weak in the short term, or at the bottom of the cycle, and it is necessary to continuously track the recovery of downstream demand later on.It is suggested that attention should be paid to the sectors with high performance growth due to the logic of domestic substitution.Recommend$SHANGHAI FUDAN (01385.HK)$It is recommended to pay attention to$HUA HONG SEMI (01347.HK)$。

III. Communications: attach importance to the defense value of operators with high dividend yield and stable profits.

The agency said that China's 5G was officially commercial at the end of 2018, and the CAPEX of operators increased year by year from 2019 to 2021, corresponding to the upward trend of the industry chain related to the construction of communication networks. For example, the revenue growth rates of AsiaInfo Technology, China Tower Corporation and China's communications services have all increased since 2018.

The performance growth of operators increased in the later stage of 5G construction.In the medium and long term, with the gradual verification of the performance growth of operators, it is expected to drive the revaluation of the plate.

In additionThe three major operators are high dividend assetsThe cash dividend ratio of China Mobile Limited, China Unicom and China Telecom Corporation will reach 60%, 46% and 60% respectively in 2021. China Mobile Limited and China Telecom Corporation also plan to further increase the cash dividend ratio to 70% within three years from 2021 to increase shareholder returns.。

The institution expects the dividend yield of China Mobile Limited, China Unicom and China Telecom Corporation to reach 7.6%, 6.5% and 6.9% respectively in 2022, which is higher than the average 4.5% and 5.7% of American and South Korean operators.There is a certain margin of valuation safety.In the medium to long termAs the performance growth of operators is gradually verified, it is expected to drive the overall revaluation of the plate.Recommend$CHINA MOBILE (00941.HK)$、$CHINA UNICOM (00762.HK)$、$CHINA TELECOM (00728.HK)$。

IV. Computer: the localization of Xinchuang is expected to speed up, and pay attention to the high toughness SaaS target of the head.

SaaS is still a high growth potential track for the computer sector, and the overall valuation of the Hong Kong stock SaaS sector fell sharply in the early days, driven by the US stock market and the recession in the real economy.The organization believes that the general-purpose company has a strong ability to resist recession.Home-made Xinchuang and Hongmeng 3.0 will bring new performance catalysisIt is recommended to focus on the recovery of market liquidity and the opportunity for a rebound at the bottom of the valuation.

It is suggested that we should pay attention to some important indicators, such as the acquisition ability of the target company, the retention rate of customers, the ability of users to realize cash and so on. Home-made Xinchuang is expected to speed up, focusing on the high toughness SaaS target of the head, recommended$KINGDEE INT'L (00268.HK)$、$KINGSOFT (03888.HK)$It is recommended to pay attention to$Vobile Group Limited (03738.HK)$、$Weimob Inc. (02013.HK)$Pay attention to the gradual release of the target benefiting from the epidemic policy, and it is recommended to pay attention to$TRAVELSKY TECH (00696.HK)$。

5. Internet media: policy optimization boosts confidence, and the Internet boom picks up.

The agency said that with the continuous strengthening of the Internet policy, the certainty of performance repair is strong, and the value of the bottom allocation is highlighted.

Among them, 1) there is still room for structural growth in short videos, and live e-commerce dividends need to be released; 2) focus on the recovery of the post-epidemic industry, Internet advertising is expected to rebound; 3) look for incremental space, pay attention to games going out to sea and industrial Internet opportunities.

The bank believes that the end of the Internet policy has arrived, the epidemic situation has improved, the economic recovery has boosted the performance of platform enterprises, and the sector is expected to usher in a double repair of performance and valuation.Recommend$TENCENT (00700.HK)$ 、$Koolearn Technology (01797.HK)$It is recommended to pay attention to$Meituan-W (03690.HK)$、$Pinduoduo (PDD.US)$。