"Zhongtegu" heat short-term decline, how to allocate Hong Kong stocks?

Source: Zhang Yusheng, China Everbright Securities

Hong Kong stock valuation at historical low, with allocation value

Historically, the current valuation of Hong Kong stocks has returned to a low level, highlighting the cost-effectiveness of allocation.

In the future, with the improvement of the domestic economic fundamentals and the easing of overseas liquidity pressure, the capital of Hong Kong stocks will be improved, and it is expected to usher in a rising trend with the support of favorable policies.

However, attention still needs to be paid to the impact of overseas risk factors on the stock market. With the background of high interest rates, the probability of various risk events in the United States will gradually increase.

As the cumulative effect of interest rate hikes continues to be released, economic pressure in the second half of the year will become more apparent, and the US economy is expected to experience a mild recession.

In the short term, Hong Kong stocks will inevitably face the risk of volatility and callback, and the negative impact on Hong Kong stocks will be relatively greater.

Hong Kong stock consumer industry is expected to rise

In April, the year-on-year decrease in RMB deposits in China was 552.4 billion yuan, which to some extent indicates that residents' consumption and investment intentions have improved.

According to the information disclosed in the first quarter report, most of China's enterprises are profitable and are in a trend of growth. The performance of the consumer industry represented by home appliances and food and beverage has improved significantly, reflecting the strong recovery of the consumer market. With the steady development of the economy and the accelerated pace of consumption recovery, residents' consumption demand will further increase.

Since this year, a series of policy documents have been introduced to restore and expand consumption.

Looking to the future, the consumer market is expected to usher in a new round of upward cycle under the favorable policies, and attention should be paid to the consumption fields such as food and beverage, tourism, and transportation.

Investment advice

In terms of allocation direction, it is recommended to pay attention to:

1. Consumption recovery will still be the core theme of the year, and it is recommended to focus on the large consumption areas with stable performance or continuous improvement in performance;

2. The "mid-estimate" sector that benefits from state-owned enterprise reform and profit growth, recommends cyclical and relatively low-valued sectors, mainly including banking, coal, construction and decoration, petroleum and petrochemical industries.