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Kaiyuan Securities: AH Premium Rate Not Constraint for HK Stocks; Tech/ Consumer/ High Div. Stocks Recommended
Recommend 68 Positive 125 Negative 45 |
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Kaiyuan Securities has released a report noting that the A-share and H-share premium rate was 132.79 as of the market close on March 11, 2025, and at the 45.5% percentile since 2015, sharply down from 151.61 (a high before the start of this round of market trend) on September 10, 2024, suggesting a notable valuation recovery in Hong Kong stocks relative to A-shares. However, Hong Kong stocks are not in a relatively overvalued environment compared to A-shares. Regarding the core driving force behind the downward recovery of the AH premium rate in this round, Kaiyuan Securities believed it was the result of the "AI+" logic combined with the phased achievements in anti-monopoly regulation of internet platforms. The biggest difference between Hong Kong stocks and A-shares on the molecular end came from the proportion of internet platform giants and hard technology giants. Internet giants like TENCENT (00700.HK), BABA-W (09988.HK), MEITUAN-W (03690.HK), as well as hard technology giants like XIAOMI-W (01810.HK), LI AUTO-W (02015.HK), and XPENG-W (09868.HK) are all listed in Hong Kong. Under the current "AI+" logic, Hong Kong stocks have greater flexibility, and the phased achievements in anti-monopoly regulation of internet platforms (especially the support revealed in the private entrepreneur meeting) have further unlocked the valuation constraints of Hong Kong stocks, thus accelerating the valuation recovery of Hong Kong stocks after entering 2025. Regarding Hong Kong stock allocation, Kaiyuan Securities recommended a barbell strategy. On one hand, the narrative logic of internet giants and technology giants will be further strengthened under the empowerment of "AI+", and the AH premium rate is anticipated to return to the relatively low levels of 2016-19 on the back of the phased achievements in anti-monopoly regulation of internet platforms, while the expected difference in domestic consumption in 2025 will bring about consumption recovery; on the other hand, the absolute dividend yield of high dividend H-shares will be higher compared to A-shares due to the existence of the AH premium, which is still more attractive to absolute return investors. As a result, Kaiyuan Securities's recommended Hong Kong stock allocation was to prioritize Hong Kong stocks in the technology and consumer sectors, with a close eye on internet platforms and automotive and semiconductor companies that will benefit most from "AI+" empowerment, as well as cultural entertainment, tourism, and pharmaceuticals with potential valuation recovery. Then, investors may pay attention to Hong Kong stocks with high dividends, including utilities, banks, and telecom operators. AAStocks Financial News |
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