CITIC Securities: Hong Kong stock adjustment drags down, A-share racing rotation.

The CITIC Securities research report indicates that the previously strong performing Hong Kong stock market sectors of new consumption and innovative pharmaceuticals have recently experienced significant adjustments, leading to large fluctuations in related A-share sectors as well. Currently, both the liquidity and risk appetite of the Hong Kong stock market have been impacted and may continue to be so for some time. Internally, the basic fundamentals continue to show a weak domestic demand bias and a structural prosperity pattern. The focus on the "science and technology innovation" topic at the Lujiazui Forum has once again increased. The Federal Reserve's June interest rate meeting remained unchanged, and the uncertainty of the US economic outlook remains at a relatively high level; the escalating tension in the Middle East raises concerns about subsequent actions by the US. The allocation direction remains focused on dividends and new growth tracks, with dividends assets continuing to serve as a core holding, while new growth directions may become a determining factor for investment success. In the short term, it is recommended to focus on AI, semiconductor sectors, as well as science and technology innovation themes, while new consumption and innovative pharmaceuticals remain under medium-term scrutiny. Key industry focuses include banks, non-bank financial institutions, transportation, utilities, electronics, telecommunications, computers, discretionary consumption, and pharmaceuticals.