CITIC Securities says the Hang Seng Composite Index has seen an
earnings-expectations reversal over the past month; interim results beats and
positive profit guidance have driven upward revisions to full-year earnings. The
Hang Seng TECH index is lagging, hit by divergent passenger-car profitability
and higher capex at leading internet platforms that compress near-term margins.
Sector outlook: upgrades for healthcare (CXO and large-cap pharma), financials
(broker asset management and insurers), utilities and cyclical transport;
downgrades for consumer, property and information technology. Flow pattern is
two-pronged: capital rotating into oversold low-base sectors while momentum
trades target names with strong earnings trajectories. Against a dense earnings
calendar and global macro volatility, the firm favors a dividend-defense plus
growth-optionalilty barbell: defensive allocation to high-dividend, low-beta,
bond-like stocks; offensive exposure to internet giants, robotics and biotech
benefiting from two-way capital flows, and tech hardware/AI applications, with
selective positions in innovative drugs and industrial metals for near-term
catalysts.
