Since the low point on January 13, 2025, the Hong Kong stock market has welcomed a significant rebound,$Hang Seng TECH Index (800700.HK)$which is particularly impressive, with a cumulative increase of over 20%, officially entering a technical bull market.

In fact, this year,$Hang Seng Index (800000.HK)$the cumulative increase has exceeded 5%, already surpassing.$S&P 500 Index (.SPX.US)$The increase during the same period; $Hang Seng TECH Index (800700.HK)$ Cumulative increase exceeded 15%, while during the same period $Nasdaq Composite Index (.IXIC.US)$ only recorded an increase of 2.49%.

From the perspective of the entire Hong Kong stock market, this year, $LAOPU GOLD (06181.HK)$ the increase reached as high as 78%, $HORIZONROBOT-W (09660.HK)$ Cumulatively increased by 67.78%, $XPENG-W (09868.HK)$ 、 $SMIC (00981.HK)$ Increased by over 46%, $BYD ELECTRONIC (00285.HK)$ 、 $KINGSOFT (03888.HK)$ Increased by about 27%.

What do institutions think?

As the first large model in China to benchmark against international giants in terms of performance and cost efficiency, DeepSeek's large model released during the Spring Festival has surpassed the products of companies like OpenAI and Meta in several benchmark tests, boosting market confidence in China's AI technology being independently controllable.

DeepSeek's model, characterized by low investment and high performance, not only impacts the global AI industry's reliance on computing power paths but also drives the valuation recovery of Hong Kong's Technology stocks, especially in the fields of AI Hardware, Software, and Consumer Electronics.

After experiencing the shock from Deepseek in China, Wall Street has updated its ratings on the Chinese market.

Goldman Sachs was the first to emphasize in its research report that this year, the MSCI Chinese Index has a 14% upside potential. Goldman Sachs expects that under neutral expectations, this index will increase by 14% to 75 points, and under optimistic expectations, the increase will soar to 28%.

Deutsche Bank released a research report on February 5, stating that global investors will recognize the competitive advantages of China's manufacturing and service industries this year, and the launch of DeepSeek is more like China's 'Sputnik' moment, leading to the disappearance of the valuation discount of Chinese stocks. The report from Deutsche Bank suggests that this year, the performance of Chinese assets will surpass that of other regions. The bull markets in A-shares and Hong Kong stocks began in 2024, and the mid-term will exceed previous highs.

UBS Group believes that innovations in large language model training and inference technologies can lower entry barriers and reduce the difficulty of adopting generative AI applications, thereby attracting more vendors and users into the market. The institution mentioned this in its outlook report at the beginning of the year.

Bullish $Kingsoft Cloud (KC.US)$ , as it benefits from strong AI computing demand, particularly in $XIAOMI-W (01810.HK)$ the massive capital expenditures allocated for the next three years, which involve investments in edge AI and autonomous driving; continue to be bullish on $Beijing Kingsoft Office Software, Inc (688111.SH)$ and $Iflytek Co.,ltd. (002230.SZ)$ (All have a Buy rating), they will benefit from the accelerated penetration of AI in Cloud Computing and edge applications. Among Datacenter Stocks, $21Vianet (VNET.US)$ (Buy rating) is the stock most favored by the Institutions, which will capture market share driven by the demand for Hyperscale Datacenters (AIDC).

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Editor/Somer