(East Asia Securities): Hong Kong technology stocks still have room for valuation reassessment, raising Hang Seng Index target price to 26,000 points.

Recently, Hong Kong stocks have significantly outperformed A-shares. Chen Weicong, senior investment strategist at East Asia Securities, pointed out that Hong Kong stocks have a higher weighting in technology stocks, while A-shares are not dominated by technology stocks. When speculating on AI concepts, Hong Kong stocks are more beneficial. On the foreign investment front, foreign investments usually come to Hong Kong stocks first, and with H-shares still trading at a discount to A-shares, foreign investment patterns will start offshore first, driving Hong Kong stocks up. Chen Weicong stated that the bank has raised its Hang Seng Index target price from the initial 24,800 points set at the beginning of the year to 26,000 points, corresponding to a forecasted P/E ratio of 11.3 times. Considering that some technology stocks are severely overbought, there may be a slight consolidation in the short term. However, he pointed out that the performance of Chinese technology stocks has optimistic guidance, with a significant increase in capital expenditure related to artificial intelligence (AI). If more large-scale model performance and broader application prospects are conveyed, there is still room for technology stocks to be revalued. He mentioned that due to the policy direction of the two sessions supporting innovative technology, in the future, the central government may provide more financing channels for science and technology innovation companies, which will have a positive impact on technology concepts such as electric cars and humanoid robots. Although he remains optimistic about technology concepts in the long run, he does not rule out sector rotation in the short term. Investors should pay attention to Chinese securities firms, restaurants, and power stocks. When asked about external risks, Chen Weicong pointed out that tariffs are the biggest uncertainty in the market. However, the market is already cautious, and since the United States is not only targeting China but may also impose tariffs on other countries, the risk is relatively manageable. He reminded that attention should be paid to whether the United States will further pressure Chinese technology companies, such as through investment bans or restrictions, as well as tightening restrictions on chip exports. He described the pressure from these actions on Hong Kong stocks as potentially greater than tariffs, but the likelihood of this happening is not high.