Institutional investors recommend a dual focus on traditional industries undergoing capacity optimization (non-ferrous metals, chemicals) and high-growth consumption sectors (beauty care, retail, EVs). This approach captures both cyclical recovery in upstream materials and structural trends in China’s consumption upgrade. Key targets include copper/aluminum producers benefiting from green transition demand and beauty brands riding Gen-Z spending power.
While Hong Kong stocks may experience near-term volatility due to global macro uncertainty, their depressed valuations (12x forward P/E, 30% below historical average) present a compelling long-term opportunity. Investors should focus on quality names in high-dividend sectors (energy, utilities) and innovative industries (biopharma, smart EVs) that align with China’s economic transformation.
The upcoming earnings season will test the sustainability of sector rotations, particularly for cyclical plays. However, with market pessimism already priced in, selectively accumulating market leaders with strong cash flows (ROE >15%) and policy support (e.g., green materials, domestic brands) offers an optimal risk/reward balance for medium-term portfolios.
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