Amid the Hong Kong stock market hitting a six-month low, which industries offer the best value for money?

Source: Guotai Junan Daiqing

The expectation of the Fed's interest rate hike has increased, and a preliminary agreement has been reached on the debt ceiling negotiations, but the alarm has not been lifted, and domestic data shows that the economic recovery momentum is insufficient. Uncertainty has increased, and the three major indexes of the Hong Kong stock market hit a six-month low today.

Therefore, it is necessary to analyze the opportunities in the Hong Kong stock market during the bottoming process and explore companies with high cost-effectiveness.

Short-term focus on "medium and special estimates" + high dividend stocks, and layout elastic varieties in the medium term

In the short term, in order to cope with uncertainty from domestic and foreign sources, it is recommended to focus on central state-owned enterprises related to high dividends and "medium and special estimates" in Hong Kong stocks.

During the period when Hong Kong stocks perform poorly or the market is biased towards volatility, value stocks usually perform better.

In the medium term, the current position of Hong Kong stocks is in the historical bottom area. If the logic of "rising in the east and falling in the west" is re-enacted, we still see opportunities for long positions in Hong Kong stocks.

In the medium term, it is recommended to continue to focus on elastic varieties. From the perspective of space, the most worthy of attention at the current position is the semiconductor industry, followed by innovative drugs, gold sectors, and the Hang Seng Technology Index if the domestic economic expectations can be repaired again.

Comparison of PB/ROE of Hong Kong stocks, A shares, and overseas industry leaders

Compared with the global market industry leaders, there are 13 industries with high cost-effectiveness in Hong Kong stocks, including banks, construction, electricity, insurance, etc.

By comparing the PB/ROE of Hong Kong stocks, A shares, and overseas industry leaders, we try to find companies with high cost-effectiveness and possible changes in industry prosperity.

According to the Wind secondary industry classification, the PB/ROE ratio of Hong Kong stocks is significantly lower than that of A shares and overseas industries and individual stocks, including:

Banking industry (the ratio of China Construction Bank, Industrial and Commercial Bank of China, Bank of China, and Agricultural Bank of China is all 0.04);

Construction industry (China Railway Construction 0.03, China Railway Construction 0.05);

Electricity industry (China General Nuclear Power 0.15);

Insurance industry (Ping An of China 0.08);

Technology hardware and equipment industry (Lenovo Group 0.06);

Household goods industry (Hengan International, Juzi Biology ratio is 0.11);

Healthcare industry (Shanghai Pharmaceuticals 0.08);

Pharmaceutical industry (WuXi AppTec 0.28);

Consumer services industry (China Duty Free 0.22);

Retail industry (Alibaba 0.15);

Materials industry (China National Building Material Company 0.03);

Capital goods industry (CITIC Securities 0.04);

Business services industry (China Conch Venture Holdings 0.02, Everbright Environment 0.03).