East Asia Securities: Expected gradual easing of US-Iran tensions, little downside risk for Hong Kong stocks, expected to fall to support at 25000 to 25500 points.

Chen Weicong, senior investment strategist at East Asia Securities, stated in a media interview that he has a slightly positive view on the US-Iran situation. Even though a comprehensive agreement may not be reached immediately in the short term, and sporadic conflicts may reoccur, the likelihood of a significant escalation of war is low. The main expectation is for the situation to gradually ease. However, there may be some volatility in Hong Kong stocks in the short term, but the downside risk is not significant. It is predicted that there is strong support around 25,000 to 25,500 points. Chen Weicong said, "As long as the situation in the Middle East does not escalate significantly, I believe that there may not be a panic selling situation in the current market." Chen Weicong believes that the market has gradually digested the situation over the past week. However, Hong Kong stocks do not seem to have enough conditions for a significant increase at current levels. As the market focus shifts gradually from the Middle East geopolitical situation to the corporate level and the policy discussion at the end of the month, attention will first be given to the first-quarter performance of Chinese stocks, especially in heavyweights like technology, AI, and e-commerce platforms. If the first-quarter earnings performance of Chinese stocks is not as pessimistic as previously thought, it could be a potential catalyst for the market. He mentioned that many Chinese stocks had their earnings forecasts revised downwards after the fourth quarter last year, so the market is generally cautious about first-quarter performance, which might actually pave the way for positive surprises. If subsidies are reduced, losses in food delivery and real-time retail improve, and guidance for the second quarter is more positive, there is a chance for a rebound in stocks. In terms of AI-related stocks, the introduction of AI intelligent products and price increases in AI cloud products in the mainland in the past few months may lead to a more positive view on the revenue and growth of cloud businesses. Therefore, he is optimistic about AI-related stocks in the upstream and cloud sectors, and recommends investing in companies related to semiconductors, chips, domestic GPUs, and printed circuit boards at a low level. On the cloud side, he recommends Alibaba (09988), Baidu (09888), Tencent (00700), and data center stocks. He also has a positive view on Chinese brokerage stocks and exchange-related stocks, as A-share trading volume has been rising recently, and IPOs in the Hong Kong market have performed well. However, he warned that energy stocks benefiting from the rise in oil prices may underperform the market in the short term. As market risk aversion decreases, banks that have been outperforming may also show a lag in performance.