On April 23, more than 1,000 stocks declined in the Hong Kong market. The Hang Seng Index closed down 0.95%, while the Hang Seng Tech Index fell 1.98%, dropping below the 4900-point level. This marks the third consecutive day of declines for the tech index.
Biotechnology and innovative drug sectors led the losses. Among tech and semiconductor stocks, declines were widespread. Automobile stocks mostly retreated, with LEAPMOTOR dropping approximately 8%.
In contrast, oil and gas stocks bucked the trend and moved higher.
Institutional analysts believe unfavorable factors are improving. Since the start of the year, the Hang Seng Tech Index has fallen over 10%, showing weak rebounds and underperforming the broader Hong Kong market and the CSI 300 Index, indicating a pattern of weak recovery.
The Hang Seng Tech Index is highly sensitive to changes in geopolitical situations. From the perspective of the domestic regulatory environment, China is continuously refining regulations for the platform economy. Looking at the fundamentals of index constituents, on one hand, the intensity of competition has decreased. On the other hand, since the beginning of the year, domestic AI models have gained global prominence.
Overall, several institutions believe the negative factors suppressing the Hang Seng Tech Index's growth are improving.
One securities firm pointed out that the relative valuation of the Hong Kong tech sector has fallen to historically low levels. Against the backdrop of AI development and national tech advancement, the Hong Kong tech sector is significantly undervalued, presenting high potential for gains.
Another asset manager stated that following its peak, the Hang Seng Tech Index experienced a significant pullback, and market pessimism regarding earnings revisions is fully priced in. Against this backdrop, the index is currently in a window with attractive potential, warranting attention.
Another international firm believes that exploding AI computing demand, increased policy support, and improving global liquidity collectively provide momentum for the index's recovery. Current valuations are at historical lows, earnings expectations have been adequately adjusted, and medium-to-long-term upward momentum is clear. While Federal Reserve policy timing requires monitoring, the overall valuation center is expected to gradually rise.
Regarding the future trend and allocation for the Hang Seng Tech Index, one securities firm recommends focusing on sectors driven by AI, such as semiconductors and hardware equipment. The commercialization of enterprise SaaS and large models is expected to enter a period of rapid growth, suggesting attention on internet leaders with high capital expenditure actively embracing AI. The logic for AI model exports continues to strengthen, with potential new model releases, making the AI application end also worth watching.
Another securities research team suggests that short-term strategies could focus on profit expectations, paying close attention to internet sectors where profits are bottoming out. For the medium term, it remains advisable to hold low-volatility dividend assets while upgrading allocations to semiconductors, large model, and cloud service leaders. Additionally, positioning could gradually shift towards some consumer staples sectors nearing an inflection point in their business cycles, aligning with the rebalancing of domestic and external demand.
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