Guosen's March strategy for Hong Kong stocks: Falling US bond yields and the deployment of DeepSeek will drive the expansion of Hong Kong stock valuations.

Guosen released a research report stating that with the decline in US Treasury bond yields and the introduction of DeepSeek, Hong Kong stocks have benefited from both the fundaments and fundamentals. The target range for Hong Kong stocks has been raised to 23,000-25,000 points by 2025. Sector wise: 1. AI related industry chain: With the release of DeepSeek, Chinese internet companies have entered a new era of AI, deploying large models which will benefit cloud computing, domestic computing power, and downstream application growth. The four relevant GICS sub-sectors are media (internet), semiconductors, software, and technology hardware and equipment. 2. Automobiles and parts: High-growth industry, with autonomous driving opening up future software valuation space. 3. Finance, high dividends: Still have good long-term allocation value in the context of loose monetary policy. Guosen's main points are as follows: Expectations for a cut in US Treasury bond rates have sharply increased. On February 28, the Atlanta Federal Reserve adjusted the US first quarter GDP to -1.5%, causing short-term concerns about economic growth rate. Expectations for rate cuts in 2025 have increased sharply to close to 3 times. It is expected that the inflation data for February, to be released in March, will fall to 2.8, better than previous data. It is inclined to believe that the upward trend in US stocks has not ended, with the expected rate cut by the Federal Reserve and the stable profits of listed companies. It is expected that the upward trend will resume in March. The significance of the open source and large-scale deployment of DeepSeek is profound. From open source models to open source tools, DeepSeek demonstrates strong technical capabilities, confidence, and an open mindset. This not only marks a milestone in China's surpassing of the US in large AI models, but also demonstrates China's technological innovation as a major AI development and application country. DeepSeek provides strong support for domestic computing power such as Huawei Ascend chips. In the future, with closer integration, Chinese AI chip companies can break through US technology barriers and even surpass them; DeepSeek's low cost will greatly reduce the application threshold for many enterprises, driving the progress of AI applications in China and around the world. Risk warning: Geopolitical uncertainty, uncertainty in US tariff policies, uncertainty in overseas interest rate cuts, uncertainty in the competitive landscape of certain industries.