Source: Brokerage China Author: Qu Hongyan Recently, China Yangtze Power hit a historical high and once again showed the slow bull stock trend of "tripling in ten years". The slow bull market has left behind many passers-by and brought good returns to the steadfast investors. It is "rare for those who triple in one year to be like carp jumping over the dragon gate, while those who double in three years are few and far between." On the other end of the investment world, however, violent collapses are also deafening, with many financial products suspected of "Ponzi schemes" ceasing payments, leaving investors with no hope of recovering their investments. Both positive and negative cases illustrate the importance of forming a suitable mentality towards money in one's lifetime; otherwise, sooner or later, you will divorce yourself from your money. "I call this the money mind, a person's IQ can reach 120, 140, or even higher levels, and perhaps some people's minds are good at doing one thing, while others are good at doing another. They can do things that most ordinary people can't do. But I know some very smart people who make very foolish decisions because they lack the money mind." Buffett once said so. The so-called money mind refers to believing in common sense, believing in compound interest, being cautious and rational, thinking independently, prioritizing security over return, not dealing with people with questionable character, not easily guaranteeing for others, not believing in windfall profits, and not trying to cross legal norms for extra benefits. In today's world of ubiquitous information, everyone's wealth may become the "prey" of those with ulterior motives. Only with the money mind, can one form good behavior habits and shield oneself from separating from one's wealth. Do not entrust your wealth easily. Wealth is easy to lose but hard to accumulate, and trust is a vital reason leading to the rapid loss of wealth. "Do not allow anyone else to manage your business unless you can watch their every move closely and understand their behavior; or you have strong reasons to believe in their character and ability. For investors, this criterion determines when you can let someone else make investment decisions for you." Graham's criterion written eighty years ago is so clear. Almost all the investors who lost their wealth in the financial products have violated the above two criteria. They did not have the ability to closely supervise the whereabouts of their funds, nor did they have sufficient reasons to believe in the character of the product issuers. They easily invested their own wealth solely based on others' glib tongue and a piece of commitment paper. They did not act as gatekeepers of their own wealth and ended up with nothing left even if the government punished the wrongdoers. "An ounce of prevention is worth a pound of cure." This is a phrase Munger often says. Destiny must be in one's own hands, and investors with a suitable money mind will try their best to find suspicious points in their investments to protect the safety of their principal. For example, whether the manager is trustworthy, whether the underlying assets are profitable, whether oneself can timely monitor the risks in the investment process, and whether the sales staff is obtaining large commissions. As long as any unreliable signs are found, these investors firmly will not invest their money. Do not desire to get rich quick. As in the capital market and anywhere else, making money is not easy, and desiring to get rich quick will lead to quick loss of wealth. In the capital market, the desire to get rich quickly often leads to investors over-allocating specific stocks, industries, or assets at the worst time. For example, buying high-risk stocks that can gain huge returns once an adventure succeeds, but the chance of success is very small, also known as "whispering stocks" by legendary fund manager Peter Lynch. "They often tell investors a story with explosive effects. These 'whispering stocks' have a hypnotic effect on people, and it is easy for you to believe that the story the company tells has an emotional appeal that can easily confuse you." This is like hearing a very tempting "sizzling" sound, making you salivate, but you did not notice that there is no steak on the grill. In the eyes of investors who lack the money mind, stable yield provided by blue chips such as China Yangtze Power cannot meet their demands. However, historical experience clearly shows that buying stocks lacking in safety solely based on imagined high yields is unwise. The long-term average investment return of general stocks is 9%-10%, which is also the average investment return of stock indexes in history, a benchmark to measure one's investment performance and the benchmark to measure fund investment performance.
Author: Zhou Le

Foreign investment giants have suddenly intensified the upgrades of China's asset ratings.

According to the latest news, Goldman Sachs announced upgrades to the ratings of several Chinese bank stocks, including Agricultural Bank Of China, Industrial And Commercial Bank Of China, Bank Of China, and CM BANK. In addition, HSBC Holdings strategists also pointed out in the latest report that the Hang Seng Index is expected to rise by 21% by 2025. $Hang Seng China Enterprises Index (800100.HK)$ They raised the end of year target for the index from 8610 points to 8800 points and upgraded the rating of the Hong Kong stock market from 'neutral' to 'Shareholding.'

It is noteworthy that southbound funds are continuously 'sweeping' the Hong Kong stocks. As of January 9, southbound funds have maintained a scale of 10 billion 'sweeps' for three consecutive trading days, with a cumulative net purchase of 39.139 billion Hong Kong dollars over the past three days.

At this current point, the focus topics for investors may be how the future performance of Hong Kong stocks will unfold.

Announced intensively: Upgraded.

On the evening of January 9, Goldman Sachs announced the upgrade of ratings for multiple Chinese bank stocks, specifically:

Upgraded. $ABC (01288.HK)$ The rating is upgraded to 'Neutral', target price 4.77 Hong Kong dollars; the rating of Agricultural Bank Of China A-shares is upgraded to 'Neutral', target price 6.06 Chinese yuan.

Upgraded. $ICBC (01398.HK)$ The rating is upgraded to 'Neutral', target price 5.62 Hong Kong dollars; the rating of Industrial And Commercial Bank Of China A-shares is upgraded to 'Neutral', target price 7.56 Chinese yuan.

将 $BANK OF CHINA (03988.HK)$ 评级上调至“买进”，目标价4.91港元；将中国银行A股评级上调至“买进”，目标价6.60元人民币；

将 $CM BANK (03968.HK)$ 评级上调至“买进”，目标价47.36港元；将招商银行A股评级上调至“买进”，目标价49.85元人民币。

与此同时，汇丰控股对港交所上市的中国股票持乐观态度，预计这些股票将受益于内地更加“有利的政策言论”以及经济前景的好转。

汇丰策略师Herald van der Linde和Prerna Garg在最新的报告中指出，2025年恒生国企指数有望上涨21%，并将该指数的年底目标位从8610点上调至8800点。同时，他们将中国香港股市评级从“中性”上调至“增持”。

This rating upgrade reflects HSBC's confidence in the outlook for the Hong Kong stock market.

HSBC strategists indicate that lower interest rates and measures to boost tourism and revitalize the Real Estate sector will support the Hong Kong stock market. They believe that the outlook for the mainland China economy has improved, and the recent shift in policy tone affirms the government's commitment to stabilizing the economy. This is a positive signal for the A-share market, and the Hong Kong market will benefit further.

Additionally, Goldman Sachs published Research Reports indicating that as Chinese demand accelerates or stabilizes, along with the orderly recovery of supply, it will support corporate product pricing and profit margins. It is believed that the performance of most China CSI Commodity Equity Index will improve compared to last year.

Therefore, Goldman Sachs estimates that the demand for China's CSI Commodity Equity Index will generally decline by 3.5% to increase by 3% in 2025, compared to a decline of 10.2% to an increase of 4.4% in 2024, indicating a significant improvement. Among them, Industrial Metals such as Copper and Aluminum are expected to benefit from policy support for the growth in demand for electric vehicles, home appliances, Consumer Electronics, as well as the robust development of renewable energy and the power grid.

Goldman Sachs also pointed out that Infrastructure construction may experience a turning point, as local governments are massively increasing debt, which will benefit Infrastructure-related CSI Commodity Equity Index, and it is anticipated that demand for Cement and Steel may stabilize again, marking the first time since 2021.$CONCH CEMENT (00914.HK)$、$CNBM (03323.HK)$The rating was upgraded from "Neutral" to "Buy",$Aluminum Corporation Of China (ACHHY.US)$The rating was upgraded from "Sell" to "Buy", while maintaining the view on$ZIJIN MINING (02899.HK)$The 'buy' rating.

How will the market develop in the future?

In terms of the market, on January 9th, the three major Hong Kong stock indices continued to fluctuate, ending the day at, $Hang Seng Index (800000.HK)$ Down 0.20%, closing at 19240.89 points; $Hang Seng TECH Index (800700.HK)$ Up 0.10%, closing at 4311.54 points; $Hang Seng China Enterprises Index (800100.HK)$ Down 0.17%, closing at 6978.97 points.

It is noteworthy that southbound funds are continuously "sweeping" the Hong Kong stocks, with today's transaction amount reaching 52.059 billion Hong Kong dollars and a net purchase amount of approximately 11.363 billion Hong Kong dollars. Among them, the net inflow of the Shanghai-Hong Kong Stock Connect is approximately 7.946 billion Hong Kong dollars, while the net inflow of the Shenzhen-Hong Kong Stock Connect is approximately 3.417 billion Hong Kong dollars.

As of January 9, southbound funds have maintained a hundred billion "sweep" scale for the third consecutive trading day, with a cumulative net purchase of 39.139 billion Hong Kong dollars over the past three days.

At this current point in time, the focus topic of investors may be, how will Hong Kong stocks perform in the future?

Looking ahead to the Hong Kong stock market, GTJA research believes that the policy side is expected to continue to exert force in 2025, and Hong Kong's profits will continue to improve slightly. As overseas central banks continue to lower interest rates in 2025, the interest rate differential between domestic and foreign sources may shrink, which could further expand policy space. Related supportive policies are expected to continue to be launched, effectively offsetting external pressures. Overall, Hong Kong's profits will continue to improve slightly in 2025.

CITIC SEC believes that since September 24 of last year, the liquidity of the Hong Kong stock market has significantly increased, and risk appetites have rebounded, with a notable drop in the proportion of short sell, indicating a significant upward trend in investor sentiment in Hong Kong stocks. Even after experiencing a relatively strong rise, the current Hong Kong stock market still shows significant attractiveness in terms of valuation and profit matching compared to major global markets. Additionally, both equity risk premium and dynamic PE ratios remain at appropriate levels or even at historical lows, with a continuous shift in investor sentiment expected moving forward.

CITIC SEC predicts that the Hong Kong stock market may usher in a reversal trend in 2025. Firstly, the valuation advantage of Hong Kong stocks from a global perspective is very significant, and the income issues caused by price pressures in our country are expected to gradually ease. Secondly, nearly 630 billion Hong Kong dollars have flowed in through southbound trading in the first ten months of 2024, greatly enhancing the relative voice of domestic capital over foreign capital, especially in the small and medium-sized market segments. Lastly, against the backdrop of a series of policies gradually being implemented, investor expectations are expected to shift.

Soochow's chief economist Chen Li believes that the Hong Kong stock market will further welcome a recovery in 2025. Especially in the first half of the year, benefiting from the expectations of fundamental improvement brought about by the policy deployments of the two sessions and further interest rate cuts by the Federal Reserve, Hong Kong stocks may perform better. However, in the second half, the Fed's rate cuts may be paused, and with the gradual unfolding of Trump's tariffs, there may be more uncertainty facing the Hong Kong stock market.

Editor/rice