Recently, the Group Corporation released its 2020 interim report. During the reporting period, the company realized revenue of 15.493 billion yuan, an increase of 11.48% year-on-year; realized net income attributable to shareholders of the parent company of 2.454 billion yuan, an increase of 9.20% year-on-year; realized non-recurring net income attributable to shareholders of the parent company of 1.849 billion yuan, an increase of 62.84% year-on-year; realized net operating cash flow of 2.29 billion yuan, an increase of 607.65% year-on-year. $Hang Seng Index (800000.HK)$在自身努力和美联储降息政策加持下，实现了一波“九连阳”的升势。

今日早间，中国人民银行行长潘功胜将与国家金融监督管理总局局长李云泽、中国证券监督管理委员会主席吴清齐聚国新办，介绍金融支持经济高质量发展有关情况，发布了一系列重磅金融政策。

受此消息影响，恒指、 $Hang Seng TECH Index (800700.HK)$,$Hang Seng China Enterprises Index (800100.HK)$Stocks have risen by more than 2%, and the Hang Seng Index is expected to challenge a 'ten-day winning streak.'

Governor of the People's Bank of China, Pan Gongsheng, stated at the meeting that since the beginning of this year, the People's Bank of China has adhered to the fundamental purpose of financial services for the real economy, and has remained committed to a supportive monetary policy stance and policy orientation. The effectiveness of monetary policy is continuously evident, with financing costs at historic lows. In accordance with the central decision-making arrangements, the People's Bank of China will steadfastly maintain its supportive monetary policy stance, intensify the intensity of monetary policy regulation, and enhance the precision of monetary policy regulation. Several policies were announced:

First, reduce the reserve ratio and policy interest rates, thereby driving down the market benchmark interest rates. Pan Gongsheng announced a recent 0.5 percentage point reduction in the reserve ratio, providing the financial market with around 1 trillion yuan of long-term liquidity.

Second, lower the interest rates on existing housing loans and unify the minimum down payment ratio for mortgages.

Third, introduce new policy tools to support the development of the stock market.

At the same time, the 7-day reverse repurchase rate was lowered by 0.2 percentage points, from the current 0.7% to 0.5%. Guiding loan market quote rates and deposit rates to decline year-on-year, maintaining the stability of commercial banks' net interest margin.

Multiple sectors collectively skyrocketed.

Affected by this news, mainland real estate stocks surged during trading, as of the time of publication.$R&F PROPERTIES (02777.HK)$rose more than 10%,$SHIMAO GROUP (00813.HK)$,$AGILE GROUP (03383.HK)$Rising more than 3% across the board,$SUNAC (01918.HK)$,$CHINA OVERSEAS (00688.HK)$,$CIFI HOLD GP (00884.HK)$Stocks are up nearly 3%.

The performance of star network technology stocks is also very impressive, real estate agencies.$BEKE-W (02423.HK)$rose more than 5%.$JD-SW (09618.HK)$rose by more than 3%,$BABA-W (09988.HK)$Rising nearly 3%.

Banks stocks are rising with the trend. $CM BANK (03968.HK)$Rose nearly 6%.$BANKCOMM (03328.HK)$rose more than 4%,$ICBC (01398.HK)$Rising by more than 3%.

How do you see the future trend of Hong Kong stocks?

• Citic Securities: Hong Kong stocks have shown characteristics of historical bottom, and are expected to usher in a monthly-level recovery trend.

Citic Securities research report believes that Hong Kong stocks are expected to usher in a monthly-level recovery trend. Since the beginning of August, various indicators such as valuation, trading volume, and fund flow of Hong Kong stocks have once again shown the characteristics of the historical market bottom since 2022.

On one hand, although the recent interim report of Hong Kong stocks shows that the revenue end is still under pressure, the progress of enterprises in reducing costs and increasing efficiency has helped Hong Kong stocks to achieve a 0.8% year-on-year increase in net income in the first half of 2024. In addition, etc.) have conducted a large number of buybacks this year, which is expected to significantly boost shareholder cash return rate. At the same time, the net profit growth expectations for Hang Seng Index and Hang Seng Tech in 2024 (Bloomberg consensus expectations) have also been continuously raised after the mid-year report in August, currently at 7.1% and 17.7% respectively.$TENCENT (00700.HK)$Companies like etc. have been conducting significant buybacks this year, expected to substantially boost shareholder cash return rate. At the same time, the net profit growth expectations for Hang Seng Index and Hang Seng Tech in 2024 (Bloomberg consensus expectations) have been consistently revised upwards since the mid-year report in August, currently at 7.1% and 17.7% respectively.

On the other hand, following the rate cut by the Fed, the Hong Kong Monetary Authority may also reverse the trend of outflows from local funds in Hong Kong stocks; from a valuation perspective, the PE ratios of major indices (excluding the H-share index) are still at historically low levels below two standard deviations from the historical average. With the catalyst of the USD rate cut cycle starting, combined with fundamental, valuation, and liquidity analysis, the cost-effectiveness of current Hong Kong stocks is still significant. The rebound since mid-September is expected to continue and become a monthly-level recovery trend, with growth styles continuing to outperform. It is recommended to focus on Hong Kong internet, biotechnology, education, and consumer electronics sectors.

• Soochow Securities: Multiple indicators show that Hong Kong stocks may have bottomed out

Soochow Securities pointed out that from a technical perspective, it seems that various indices in the Hong Kong market have bottomed out three or four times. Observing trading volume, profit growth (company revenue and profits), combined with the USD entering a rate cut cycle, many indicators indicate that the Hong Kong stock market has bottomed out.

Trading Perspective: Hong Kong stocks have seen low volume and low prices; Profit Perspective: Hong Kong companies may have passed the low point; USD Interest Rate Perspective: Valuation pressure has eased.

• China International Capital Corporation: Hong Kong stocks benefit in the long term from domestic growth and policies, focusing on interest rate-sensitive growth stocks

China International Capital Corporation believes that the 50bp unconventional rate cut by the Fed boosted Hong Kong stocks significantly last week. Hong Kong stocks are more sensitive to external liquidity and follow rate cuts due to the linked exchange rate system, which can bring greater short-term elasticity, but the long-term sustained rise still comes from domestic growth and policies.

At the industry level, it is advisable to continue focusing on interest rate-sensitive growth stocks (internet, technology growth, biotechnology, etc.), as well as local dividends and real estate in the Hong Kong stock market, and the export chain driven by U.S. real estate demand. Until stronger fiscal support is seen, the structural market (high dividends + technology growth) with wide-ranging volatility remains the main theme.

• GTJA: Hang Seng Index technical trends are positive, tending to believe that Hong Kong stocks will perform well in the fourth quarter.

Since February this year, the Hang Seng Index has performed almost the same as the Nasdaq in terms of increase. Currently, the technical trend of the Hang Seng Index has improved. The US interest rate cut will improve the macro environment facing the Hong Kong stock market. At the same time, the appreciation of the renminbi will stimulate market interest in renminbi assets. The Hang Seng Index broke through the 18,000-point integer barrier last week, and it is believed that Hong Kong stocks will perform well in the fourth quarter.

In addition, investors who are bullish on the future trend of the Hong Kong stock market can also invest through ETFs in the Hong Kong stock market, including: $CSOP Hang Seng TECH Index ETF (03033.HK)$and$CSOP Hang Seng TECH Index Daily (2X) Leveraged Product (07226.HK)$and$CSOP Hang Seng Index Daily (2x) Leveraged Product (07200.HK)$and$TRACKER FUND OF HONG KONG (02800.HK)$and$Hang Seng H-Share Index ETF (02828.HK)$etc.

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Editor/ping