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<Research>CICC Forecasts ST HSI at 23,000-24,000, Eyes Themes of Stable Returns, Tech, Overseas Expansion, New Consumption
CICC published a strategy report on Hong Kong stocks, stating that the essence of the current local market rebound is rooted in optimism toward technological trends. The extent to ...
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<Research>CICC Forecasts ST HSI at 23,000-24,000, Eyes Themes of Stable Returns, Tech, Overseas Expansion, New Consumption
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CICC published a strategy report on Hong Kong stocks, stating that the essence of the current local market rebound is rooted in optimism toward technological trends. The extent to which this sentiment has been priced in and the remaining "imagination" space for the future are critical factors in determining the market's potential moving forward, the broker opined.

In CICC’s assumption, first, the broader direction of the current AI trend, narrative shifts, and re-rating is correct. However, second, short-term timing is crucial, with position sizing and cost management being equally important. If near-term catalysts are limited, or if risks such as underwhelming policies or increased external disturbances arise, a wait-and-see approach is advisable in the short term.

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CICC maintained its short-term HSI target range of 23,000-24,000, with a bull case of 25,000. The report clarified that this static estimate does not imply a sharp plunge upon reaching these levels, nor does it rule out a potential breakout propelled by short-term capital and sentiment. However, it suggested that continuously overstretching optimism before long-term expectations materialize could lead to greater market divergence.

On the industry front, the mid-term outlook remains focused on structural opportunities, with technology, underpinned by industrial trends, serving as the key theme. In the short term, however, if portfolio adjustments are needed, investors could consider reallocating to dividend-paying assets that have underperformed recently to achieve balance.

Over the long term, CICC continued to recommend focusing on four key investment themes: first, stable returns (dividends and buybacks, particularly from growth companies with high net cash ratios); second, technology (AI computing power and applications related to DeepSeek), such as cloud servers, domestic computing power vendors, AIDC, AI software, smart driving, humanoid robots, and consumer electronics; third, overseas expansion, led by mid-tier manufacturing, media, and new retail; and fourth, new consumption, spotlighting leading companies catering to evolving demographics and consumption habits.

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