Bank of East Asia wealth management strategist Chen Weicong said tech firms’
higher AI spending and rising energy and memory production costs have weakened
earnings recovery for heavyweight tech and consumer names, prompting a cut to
this year’s Hang Seng earnings forecast and a target reduction from 29,000 to
27,100. The implied P/E on the forecast is about 10x, slightly below the 10-year
average of ~10.5x, making valuations increasingly attractive and recent
overselling a buying opportunity. He expects a short-lived phase rebound in H2;
the July Politburo meeting could be a catalyst if it signals further
growth-stabilizing policies.
