Jianyin International published a strategy report on Hong Kong stocks, stating that in the past month, the Hang Seng Index, Hang Seng China Enterprises Index, and Hang Seng TECH Index saw declines between 6% and 10%. In the Hang Seng Composite Industry Index, most Global Sectors experienced a downturn. Among them, the Medical Care and Utilities Sectors performed the best, rising by 6% and 2% respectively, while the Industrial and Information Technology Sectors performed the worst, with declines of 8% and 7%. So far this month, Utilities and Consumer sectors have shown the most significant performance, with increases of 3% and 1% respectively.
Due to the potential impact of 'countervailing tariffs', profit forecasts have been adjusted downwards. In the past month, the annual EPS forecast has been adjusted downward for 15 out of 20 industries. Among the 20 major industries, 9 industries currently have PE ratios higher than the five-year average expected PE ratio, while the media and non-essential consumer services sectors have PE ratios lower than the five-year average by 0.9 standard deviations, and the telecommunications industry has a PE ratio higher than the five-year average by 2.0 standard deviations.
Among the actively traded stocks in the Stock Connect, southbound funds continue to favor growth stocks. In the past month, Alibaba (09988.HK) recorded the highest net buy of southbound funds, while its stock price still fell by 9%. TRACKER FUND OF HONG KONG (02800.HK) faced the largest net sell of southbound funds, with its stock price declining by 6%. In the past two weeks, the inflow of southbound funds has slowed, and there has even been significant outflow.
Jianyin International pointed out that the overall tone of last week's Central Political Bureau meeting was positive, stabilizing market sentiment. The meeting noted that 'external shocks have increased', for the first time mentioning 'international economic and trade struggles', and emphasized the need to implement more proactive macro policies as soon as possible, predicting that the policies set by the Political Bureau meeting will be gradually implemented before the end of June. If there is an unexpected weakening of the economy, the central government still has sufficient incremental policy tools to stabilize the market and expectations. In the short term, it is expected that the Hang Seng Index will fluctuate around 22,000 points. The bank suggests that investors adopt a Range trading strategy and closely monitor the progress of China-US tariff negotiations as well as changes in non-tariff barriers, with a focus on allocating defensive dividend sectors.
Jianyin International also listed the stocks with the highest southbound fund inflows in recent months (data as of April 25 this year), with Alibaba ranking first (net buy of 20.722 billion yuan), Tencent (00700.HK) second (net buy of 14.223 billion yuan), Xiaomi (01810.HK) third (net buy of 11.45 billion yuan), Meituan (03690.HK) fourth (net buy of 10.068 billion yuan), POP MART (09992.HK) fifth (net buy of 4.414 billion yuan), CNOOC (net buy of 3.486 billion yuan) sixth, SMIC (00981.HK) seventh (net buy of 3.283 billion yuan), and China Mobile (00941.HK) eighth (net buy of 2.126 billion yuan).
