Industrial: Current valuation of Hong Kong stocks still has room for improvement compared to US stocks which are significantly undervalued.

Industrial released a research report stating that Hong Kong stocks have led Chinese assets since the beginning of this year, attracting global investors' attention. After experiencing a significant increase recently, from the perspective of broad-based indices, such as the Hang Seng Index and the Hang Seng Tech Index, whether in terms of absolute valuation, ERP, or relative valuation compared to American stocks, they all show a certain discount and room for improvement. In comparison with industries, most Hong Kong stock industries show a significant discount compared to American stocks, and some industries have obvious advantages in terms of valuation and profit growth. At the level of leading companies, Hong Kong technology leaders are significantly discounted compared to American technology leaders, and many Hong Kong companies are undervalued compared to American stocks. Industrial's main points are as follows: 1. Broad-based indices - In terms of absolute valuation, as of February 26th, the PE_TTM of the Hang Seng Index was 10.36, at a level below the 65.1% percentile of the past five years, showing a 40.8% discount compared to the previous peak in January 2021. - In terms of absolute valuation, as of February 26th, the PE_TTM of the Hang Seng Tech Index was 24.69, at a level below the 29.6% percentile of the past five years, showing a potential increase of over 130% compared to January 2023. - In terms of ERP, as of February 26th, the Hang Seng Index's ERP was 5.4%, below the 6.7% percentile of the past five years, with potential downside of 1% compared to February 2021. - In terms of ERP, as of February 26th, the Hang Seng Tech Index's ERP was -0.2%, below the 30.4% percentile of the past five years, with potential downside of 1.6% compared to January 2023. () Industry - Comparing the expected PEs and PBs of Hong Kong and American stocks for 2025, it was found that most Hong Kong stock industries show a significant discount. Specifically, sectors such as trade and retail (including Alibaba), raw materials, finance, and energy are discounted by over 50% compared to American stocks, while some industries such as electronics, medical services, and medical technology in Hong Kong are valued higher than their American counterparts. () Leading companies - Overall, Hong Kong technology leaders are significantly discounted compared to American technology leaders. As of February 26th, the relative PE of Hong Kong's seven technology leaders compared to American technology's "seven sisters" was at a 44.2% percentile level in the past five years, with potential upside of 117.9% compared to January 2023. Individual stocks such as Ideal Car, BYD Company, JD, Industrial and Commercial Bank of China, PetroChina, Alibaba, Baidu, Anta, etc. are still relatively undervalued compared to American stocks. Risk Warning: This article is a data analysis report and does not constitute recommendations or suggestions for industries or individual stocks.