Source: Sina Hong Kong Stock

Guoxin Securities released a research report saying that the trend of Hong Kong stocks in January shows that the current boom is still unable to determine the stock price trend. Many sectors (Hang Seng Finance, Hang Seng Internet, Hang Seng Technology, Hang Seng Auto, Hang Seng Healthcare) showed a state where performance improved but stock prices fell. The main standard for capital stock selection is a dividend rate perspective. Prosperity investment is only applicable in the two major sectors of consumption and high dividends, which poses a great challenge to growing investors.

Therefore, wait patiently for the bottom to appear, because in the environment on the left, many eventful effects may be amplified, triggering a panic sell-off of capital. In terms of recommendation order, the bank also adjusted to focus on the direction of high dividends: first, it continues to recommend the direction of high dividends; second, it is recommended to search for opportunities under the keyword “exit and travel.”

In addition, Hang Seng Technology, Innovative Pharmaceuticals/Healthcare, Automobiles, and Electronics currently still have some concerns from policy, competition, and markets, and most of these growing companies are not easy to evaluate value based on dividends. Although some companies are already very prosperous, if the sector's underlying investment logic is not booming investment, it is very difficult to select individual stocks from a business perspective, the bank suggests waiting until performance-stock prices turn positive before selecting individual stocks.

Guoxin Securities's views are as follows:

US: Elections since 1948 have generally been flat and rising. Statistics show that since 1948, the S&P 500 had a median increase of 9.5%; in the first half of the year, the increase was small (3.3%) and the second half (4.7%); in four quarters, the increase was 1.3% in the first quarter, 2.2% in the second quarter, 2.2% in the third quarter, and 2.9% in the fourth quarter. It also showed a better situation in the second half of the year than in the first half of the year, similar to the trend of rising before and after.

Our judgment is that the Federal Reserve will maintain its policy of cutting interest rates 3-4 times in 2024. The market consensus was reduced from cutting interest rates 6 times for the whole year at the beginning of January to cutting interest rates 5 times at the end of January. Our differences with the market are still our views on the unemployment rate. Furthermore, according to the rapid decline in the scale of reverse repurchases of treasury bonds, US liquidity will soon be under pressure in May, so we judge that the Federal Reserve will soon begin to cut interest rates or stop downsizing in the second quarter.

Domestic: Exports continued to grow well. Exports continued to grow in January, and with overseas inventories still at a low level, we believe that export recovery will continue. Despite favorable policies, the market has failed to reverse the downward trend, which may indicate that it will take some time to absorb the impact of the real estate chain.

We discussed the influencing factors behind the rise and fall of the index from a cyclical perspective, and compared the Shanghai Composite Index, WinD All A Equal Weight, Guoxin Value, and Wande's pre-increase indices. The data shows that equal weight is superior to market value weighting, the entire market is superior to a single exchange, and rapid iteration is superior to slow iteration of indices.

Hong Kong stocks: Seek opportunities in high dividends, exports, and travel. The trend of Hong Kong stocks in January shows that the current boom is still unable to determine the stock price trend. Many sectors (Hang Seng Finance, Hang Seng Internet, Hang Seng Technology, Hang Seng Auto, Hang Seng Healthcare) are showing an improvement in performance but a decline in stock prices. The main standard for capital stock selection is a dividend rate perspective. Prosperity investment is only applicable in the two major sectors of consumption and high dividends, which poses a great challenge to growing investors.

Therefore, we will wait patiently for the bottom to appear, because in the environment on the left, many eventful effects may be amplified, triggering a panic sell-off of capital. In terms of recommendation order, we have also adjusted mainly in the direction of higher dividends:

1. Continue to recommend the direction of high dividends. High dividends will still have unique value in 2024 to deal with a shortage of possible high-yield assets with fixed income;

2. In the previous monthly report, we mentioned that large consumption already has a good cost performance ratio, and we recommend looking for opportunities under the keyword “export and travel”;

3. Hang Seng Technology, Innovative Pharmaceuticals/Healthcare, Automobiles, and Electronics still have some concerns from policy, competition, and markets, and most of these growing companies are not easy to evaluate value based on dividends. Although some companies are already very prosperous, if the sector's underlying investment logic is not boom investment, it is very difficult to select individual stocks from a business investment perspective, we recommend waiting until the performance-stock price changes to a positive correlation before selecting individual stocks.

Risk warning: Geopolitical uncertainty, uncertainty about the extent of overseas interest rate cuts, uncertainty in the competitive pattern of some industries, uncertainty in industry regulatory policies.

Editor/jayden