CITIC Securities: The Hong Kong stock market first suppressed and then rose, focusing on four offensives + two bottom warehouses

According to the Zhitong Finance APP, China Merchants Securities released a monthly report on Hong Kong stock strategies, stating that looking ahead, the fourth quarter is expected to experience a decline followed by a rise. In the short term, in the absence of incremental positive factors, Hong Kong stocks may continue to fluctuate. However, as marginal positive factors accumulate, such as the expected easing of tariff issues, the "14th Five-Year Plan" incremental policies from the Fourth Plenary Session, and strengthened expectations of interest rate cuts by the Federal Reserve driving foreign capital inflows, combined with the structural high prosperity of the new economy, it is expected to support the upward movement of Hong Kong stocks. The allocation direction focuses on four offensive sectors (non-ferrous metals/technology/electricity/insurance) + two bottom positions (turnaround/dividend).

Hong Kong stocks are expected to experience a decline followed by a rise in the fourth quarter. In the short term, in the absence of incremental positive factors, Hong Kong stocks may continue to fluctuate. However, subsequent marginal positive factors are expected to accumulate, driving the rise of Hong Kong stocks: 1) Continuous innovative breakthroughs in China's technology industry; 2) Low probability of extremely high tariffs being implemented, with the China-U.S. tariff issue expected to ease around key points; 3) The Fourth Plenary Session of the Communist Party of China discussing the "14th Five-Year Plan," boosting risk appetite; 4) Continued strengthening of expectations for interest rate cuts by the Federal Reserve. In the medium to long term, after the Federal Reserve enters a rate-cutting cycle, the resonance of "dual easing" policies between China and the U.S. will lead to continuous capital inflows; future fundamental improvements, upward revisions of profit expectations, and valuation recovery will drive Hong Kong stocks to show a slow bull trend.

The "four offensives" focus on elastic varieties. Non-ferrous metals: driven by the triple factors of U.S. dollar depreciation, low interest rates, and liquidity. Gold is also driven by safe-haven demand due to rising global geopolitical risks and central bank purchases. Copper mines benefit from supply contraction and demand growth driven by new industries. Technology stocks: China's AI industry is rapidly evolving, with high prosperity. It has become a new growth engine and is expected to continue making breakthroughs. High-end manufacturing such as humanoid robots and autonomous driving is on the rise. Electricity: the "shovel seller" of the AI revolution. In the short term, themes like controllable nuclear fusion and reflections from U.S. stocks; in the medium term, equipment exports; in the long term, power generation and grid construction. Insurance: improvement in equity investment returns brought by rising stock markets, with Hong Kong stock insurance valuations significantly lower than A-shares.

The "two bottom positions" are suitable for long-term layout and hedging. "Turnaround" strategy: represented by essential consumption, showing initial signs of a supply-demand turning point after four years of difficulties. However, valuations remain at the historical lowest 20th percentile. Leading companies with competitive advantages can still increase market share and profit margins to achieve alpha growth. High dividend strategy: the Hang Seng High Dividend Yield Index has a dividend yield of 6.29%, with stable dividend-paying ability. Driven by the growing demand for "fixed income +" products from southbound capital, residents' deposits are "passively relocating," and the demand for dividend stock allocation remains strong