CICC: It is expected that the short-term Hang Seng Index will be between 23,000-24,000 points. Focus on stable returns, technology, going overseas, and new consumer trends.

The CICC released a research report stating that the essence of the current rebound in Hong Kong stocks is based on an optimistic sentiment towards the tech trend. The extent to which this sentiment is factored in and how much "imagination" space there is for the future are key to answering questions about the future market space. The bank believes that first, the current trends in AI, narrative changes, and valuation reassessment are correct, but secondly, it is also important to grasp the pace, position, and cost in the short term. If there are limited short-term catalysts expected, and even risks of policy changes not meeting expectations and increasing external disturbances, it is better to adopt a short-term wait-and-see approach. The bank continues to maintain a short-term Hang Seng Index estimate of 23,000-24,000 points, with an optimistic scenario at 25,000 points. The bank stated that static calculations do not mean that a drop will definitely occur after reaching a certain point, nor does it mean that a breakthrough will not occur in the short term under the assistance of funds and sentiment. However, it does imply that overextending optimism until long-term expectations cannot be met will lead to increased market divergence. In terms of industries, in the medium term, the main focus should be on structured market trends, with technology backed by industrial trends as the main theme. However, in the short term, if adjusting positions, one can choose to balance out some dividend-yielding assets that have underperformed in the past. In the long term, the bank still recommends focusing on four main areas: stable returns (dividends + buybacks, especially growth companies with high net cash levels); technology (DeepSeek related to AI computing power and applications), such as cloud servers, domestic AI computing power manufacturers, AIDC, AI application software, smart driving, humanoid Siasun Robot & Automation, and consumer electronics; going global, focusing on mid-range manufacturing, media, and new retail; and new consumption, catering to current population and consumption habits. Since the end of 2023, Hong Kong stocks have experienced four rapid rebounds followed by overbought pullbacks, but with the phenomenon of continuously raising the bottom (trillion dollar national debt at the end of 2023, property policies on May 1, 2024, the 924 market in 2024, and the market after the Spring Festival in early 2025), indicating that policy actions are effective. Therefore, as the bottom continues to rise, even if the market experiences a pullback, the previous declines are not completely erased; however, the market will extrapolate its strength linearly, leading to rapid highs followed by overbought pullbacks. Therefore, the best strategy in this situation is to "actively buy low and take profits moderately when excited," while focusing more on structural market trends based on fundamentals and industrial trends.