Shenwan Hongyuan Group: Optimistic about Hong Kong stocks becoming consensus, technology innovation is a highly resilient direction in the rebound.

On September 22, Shenwan Hongyuan Group Securities pointed out in its weekly strategy report "Effective Rebound Needs to be Triggered by External Forces" that it is optimistic about the Hong Kong stock market becoming a market consensus. Hong Kong stocks benefit more from the Fed rate cut, with advantages in terms of value for money and supply-demand of funds concentrated in the short term. The judgment that high dividend stocks are preferred for relative returns is being verified. Stable capital market expectations require a concerted effort for effective policy implementation and style balance. Increasing allocation of high dividend stocks in appropriate positions by insurance funds is a long-term correct strategy. Based on second quarter reports, the report recommends investing in new energy vehicle batteries, grid equipment, wind power, innovative drugs, and insurance. Science and technology innovation will be a high-elasticity direction in the rebound by 2024. In the short term, being bullish on Hong Kong stocks is a consensus among institutional investors. The advantages of Hong Kong stocks relative to A-shares are reflected in three marginal trading fund characteristics: firstly, Hong Kong stocks benefit more directly from the Fed rate cut, with less resistance to foreign capital inflow. Secondly, mainland China mutual funds prefer the distinctive core assets of Hong Kong stocks, making future trading more flexible. Thirdly, Hong Kong stocks have a higher value for money in high dividend yields, and allocating high dividend stocks in appropriate value positions is a trend, making Hong Kong stocks a preferred choice. In the short term, core assets of Hong Kong stocks along with pro-cyclical high dividend assets are more advantageous. This reflects the value for money advantages and supply-demand of funds of Hong Kong stocks. In the short term, the rise of Hong Kong stocks proves the value for money of assets in Greater China and the objective existence of bull forces. The conditions for the rebound of Hong Kong stocks are relatively weaker, while the conditions for the rebound of A-shares are relatively stronger, possibly requiring a change in policy direction/stabilizing capital market expectations with significant policy efforts to bring about a greater return of risk appetite. Allocating high dividend stocks during pullbacks is proving to be a preferred choice for relative returns. Stability of capital market expectations requires a concerted effort for effective policy implementation and style balance. Being significantly tilted towards value/growth may not be beneficial. Subsequent strengthening of capital market policies and adjustments in high dividend stocks will also rebound. Insurance funds actively allocate based on reasonable return levels, which is correct in the long term. Insurance funds allocation and passive products of market development are long-term core allocation funds for high dividend stocks. Banking, coal, copper, household appliances, liquor, and thermal power all have rebound opportunities. Shenwan Hongyuan Group continues to recommend investing in new energy vehicle batteries, grid equipment, wind power, innovative drugs, and insurance based on second quarter reports. Timing is crucial for science and technology innovation investments, with the key being the overall restoration of risk appetite. Science and technology innovation is a direction with relatively little resistance in the next 25 years, while risk appetite stabilizes in the 24-year phase, competing for science and technology innovation has elasticity.