Hong Hao: Hong Kong stocks have already been revalued, what we need to look at next is earnings.

Recently, in an interview, Hong Hao, the Chief Economist of CICC Group, stated that after experiencing the vigorous market this year, the price-to-book ratio in the Hong Kong market has returned to the high points since March 2021 and February 2023. If this market is a reassessment of market valuation, then the market has been reassessed. The next step is to look at profitability. Currently, the Hong Kong stock market sentiment is high, but technical charts show that some stocks such as BABA-W (09988) and Hong Kong Exchanges (00388) have not yet surpassed the high point in September 2024. Therefore, for contrarian investors, it may be advisable to wait a bit to find a better timing for adding positions. If you already have a position, you can continue to hold, but it is not recommended to blindly add positions in the current extreme sentiment. Regarding artificial intelligence, Hong Hao believes that China has suddenly become a leader in large model competitions. After the hype of this round of speculation subsides, the academic community needs to think about how to further research, how to turn the AI technological revolution into real fundamental changes and company profit growth, which is the most important thing. The performance of the humanoid Siasun Robot & Automation sector has indeed been very good, with funds rising by about 70% since the beginning of the year. This is an investment opportunity, but it is still unclear whether it will turn into a truly profitable opportunity. China's competition is always based on low-cost competition. Will there be differentiated competition due to the progress of AI in the future? This is the most anticipated. For example, Siasun Robot & Automation with real AI thinking ability can truly achieve the purpose of elderly care, housework, and so on. Regarding gold, Hong Hao pointed out that the risk of US dollar credit deficiency will inevitably manifest in the depreciation of the US dollar, which has already begun. The US dollar is the worst-performing major currency this year, without exception. Therefore, gold can occupy a place to hedge against the risk of US dollar credit. In the past three years, the US has printed more dollars than in the 200-year history of the country. If we want to hedge against future inflation risks, gold should have a place. In addition, since Trump took office and waved various "big sticks", all his allies have been beaten black and blue. Gold, as the oldest fiat currency in history, should also have some resources to hedge against geopolitical policy risks. Hong Hao believes that gold is for hoarding, not for speculation or use. Therefore, although 3200 (target price) is already an unprecedented high, whether it is inflation adjustment driving the gold price or nominal gold price hitting new highs, this new high is just the beginning. Compared to the subsequent increase, the previous increase is insignificant, and the doubling is the start of the official bull market for gold. A bull market always starts from a new high, not a low point. A new high price generates a new bull market, which is the path to redefining the value of gold's existence.