GF Securities: It is likely that there will be a phase of simultaneous rise in Hong Kong stocks and A-shares before and after the Spring Festival.

GF Securities released a research report stating that looking back at historical data, the probability of the Hang Seng Index rising in the three trading days before the Spring Festival is 82%, while there is no clear calendar effect after the festival with a probability of increase ranging from 40% to 60%. The typical window of the Spring Festival to the Two Sessions is not naturally suitable for the Hong Kong stock market. However, this time may be different as the pricing logic of Hong Kong stocks has been changing in recent years, with a stronger correlation with A-shares and a weaker correlation with US stocks. This means that with the obvious increase in risk appetite in the mainland market, there is a possibility of "passively following" the rise of Hong Kong stocks, such as after the Spring Festival in 24 and 25. How to view several recent bearish factors in the Hong Kong stock market? (1) The adjustment of tax categories for operators is not a tax increase, but a reflection of industry technological evolution and changes in business structure in terms of tax policy. The current optimization direction of tax policy focuses more on cleaning up inappropriate tax incentives formed in the past based on the stage of technological development, such as the dynamic reassessment of high-tech enterprise qualifications and updates to recognition standards, aimed at promoting the precise application of tax incentives to truly technologically advanced companies. (2) The strengthening of the RMB against the Hong Kong dollar, although it will not affect the trend of Hong Kong stocks, does indeed lead to a worse holding experience due to exchange losses. However, the RMB does not have a long-term basis for large unilateral appreciation. (3) Trump's nomination of Wosh has caused concerns in the market about the pricing power of foreign capital in certain industries. However, it should be noted that if overseas liquidity is restored beyond expectations, industries where foreign capital has pricing power may also face substantial net inflows of funds. Industries with pricing power for foreign capital include Internet, hardware equipment, software services, home appliances, media, while industries with pricing power for Chinese capital include telecommunications services, petroleum and petrochemicals, coal, semiconductors, banks, among others. (4) The large number of IPOs in the Hong Kong stock market does not have a significant impact on the market, with the main impact being the peak of lock-up periods six months after the IPO. For example, in March 21, 22, and 23, there were similar times when lock-up surges occurred, with the main companies being in the non-ferrous metal and beverage sectors. The unlocking scale of medium and large-scale companies was 87.2 billion Hong Kong dollars, higher than the previous year's year-end peak. Due to the fact that Hong Kong stock connect accounts cannot participate in IPOs and enjoy the benefits of scarce company listing, but instead have to endure the risks of lock-up release, this may indeed be one of the main concerns of southbound capital for the Hong Kong stock market in 2026. Outlook: Opportunities are brewing in market sentiment digestion, focusing on potential turning points brought by the peak of unlockings after the festival. When sentiment is low, gradually layout (1) technology leaders benefiting from the AI industry trend, such as the Internet; (2) high dividend stocks with digestible valuations and stable fundamentals; (3) quality companies that may rebound after the unlock pressure is released. For example, stocks like Contemporary Amperex Technology experienced a significant pullback in late November 25 due to market concerns about liquidity impact before the unlock, the risk was priced in early; once the unlock is completed, the depletion of bearish factors may lead to a quick bottoming out and stabilization or even a rebound in stock prices.