According to the market outlook report released by BOCOM INTL this year, the Global economy is entering a phase of cyclical transition. Monetary policy is shifting from tightening to easing, and financial system liquidity is expected to improve. However, structural challenges such as geopolitical situations and rising trade protectionism are stirring undercurrents. In the post-tightening era, the growth landscape faces a game of policy easing versus structural challenges, and investors must strategize before acting to seize opportunities amidst changes, rather than simply following traditional pro-cyclical investment logic.

The bank expects that in 2025 the stock market will have both support and face disturbances, recommending a balanced allocation. Regarding Insurance stocks: both asset and liability sides face relatively high bases, but they possess both defensive qualities and flexibility, recommending Ping An and Taikang; for Banks: focus on high dividend themes, moderately increase flexibility, and pay attention to state-owned banks and China Merchants Bank (03968.HK); for Securities stocks: business trends are expected to improve, but the valuation is reasonable, recommending CITIC SEC (06030.HK) and Huatai (06886.HK).

In the Technology sector, BOCOM INTL believes that the foundational investment in AI will continue to increase, and there may still be gaps in Hardware supply. The CSP Cloud Computing Service business is accelerating, supporting long-term investments in AI infrastructure. Hardware companies are stabilizing with a slight decrease in inventory, with inventory days for Smart Phones, Servers, and PCs declining notably. It is recommended to at least maintain exposure related to AI, while allocating more diversely within the Technology sector. In the Internet sector: demand is recovering, and there is optimism about the attractive valuations of quality platforms. The impacts of new policies on both online and offline Consumer spending will be reflected soonest. It is advised to focus on core businesses with stable growth, improving profitability, and valuation recovery opportunities brought by high Shareholder returns. Bullish on the alleviation of competition in OTA and local lifestyle sectors and consistent solid performance, with significant valuation recovery opportunities in "E-commerce > Education > Gaming > Software." Key attention should be on Alibaba-W (09988.HK), Trip.com-S (009961.HK), NTES-S (09999.HK), Tencent (00700.HK), TAL Education (TAL.US), New Oriental (EDU.US), MEITUAN-W (03690.HK), and the pullback opportunities of undervalued companies.

In the Real Estate sector, the bank expects a stabilization and moderate recovery. For domestic housing, a gentle recovery in home-buying sentiment is anticipated, with fundamentals recovering and transaction areas rising by 15% year-on-year. If the sales momentum continues, it will help stabilize the finances of real estate companies. As for the Hong Kong property market, some factors are beginning to turn and stabilize the residential and retail markets, while remaining cautious about the office sector. Interest rate cuts are expected to be a positive catalyst in the next 12 to 18 months, with Link REIT (00823.HK) as the industry's top choice.

Looking ahead to 2025, with the enhancement of range-extended/hybrid technology, BOCOM INTL expects that the penetration rate of New energy Fund vehicles in mainland China will rise to 60% this year, and smart driving is expected to quickly penetrate the market below 200,000 RMB; the penetration rate of Henry Hub Natural Gas heavy-duty trucks is expected to rise to 31% by 2025, increasing SINOTRUK's market share; The consumption sentiment in the two-wheeler industry is recovering, and the industry's leader Yadea (01585.HK) is expected to increase its market share; it is expected that from 2024 to 2026, the Global Battery demand will have a compound growth rate of 14%, and industry concentration will increase.

Furthermore, the bank expects the Global economic landscape this year to show a coexisting characteristic of monetary policy easing and structural challenges. Major central banks entering a rate-cutting cycle will drive liquidity improvements, but potential rising trade protectionism may constrain recovery momentum. In the context of increasing divergence in the pace of economic recovery, major asset allocations need to focus on capturing structural opportunities, while also emphasizing risk hedging and strategic flexibility.

Regarding the anticipated incremental fiscal policy for 2025, BOCOM INTL indicates that considering the need to continue introducing measures such as the supplementary core Tier 1 capital for large state-owned commercial banks (with a projected scale of 1 trillion RMB), the net financing scale of incremental fiscal policy for 2025 is expected to reach between 100 billion and 12 trillion RMB, an increase of 0.02 million to 3 trillion RMB compared to 2024.