Xu Meng, executive head of Huaxia Fund's quantitative investment department and fund manager, said that 2026 will be a year of shrinking+profit growth for Hong Kong stocks. Leading industries can be classified into two categories: reversal at the bottom and strengthening of industry trends or long-term logic. Based on this logic, he is relatively more optimistic about the flexibility of the Hong Kong stock market. Among them, medium- to long-term investment value in the technology sector is more prominent, and short-term pullbacks provide investors with better allocation opportunities. Xu Meng believes that, first of all, judging from the characteristics of momentum, the long-term momentum of core indices such as the Hang Seng Technology Index and the Hang Seng Index has maintained an upward trend over a period of one year. The current short-term pullback is in line with expectations. From the perspective of institutional allocation, this provides a good opportunity for intervention. Second, the fundamentals of the Hong Kong stock technology sector are clearly driven. “Hong Kong Stock Connect Technology brings together domestic AI core assets, covering leading companies in the entire industry chain, such as computing power, models, software applications, and hardware terminals. Moreover, if major domestic Internet companies participating in the global AI competition follow up in terms of capital expenditure and upstream and downstream layout, it is expected to catalyze a new round of technology markets.” Xu Meng said that the advent of DeepSeek will push Chinese technology companies to reposition their global competitive advantage, and the reshaping of confidence and mentality will push domestic and foreign investors to re-examine investment opportunities in China. Therefore, the valuation gap between China and the US technology stocks is expected to subside, and the valuation center is expected to move upward. Finally, in terms of capital, Xu Meng predicts that southbound capital is expected to continue to flow into Hong Kong stocks in 2026. Furthermore, Hong Kong stocks are a “bridgehead” for foreign investment into Chinese assets, and are highly correlated with overseas liquidity. The Federal Reserve began a new cycle of interest rate cuts in September 2025. Multiple signals indicate that the general trend of easing will continue in 2026. Therefore, under the resonance of the easing cycle between China and the US, Xu Meng believes it is expected to support Hong Kong stocks to maintain abundant liquidity.

Xu Meng, executive head of Huaxia Fund's quantitative investment department and fund manager, said that 2026 will be a year of shrinking+profit growth for Hong Kong stocks. Leading industries can be classified into two categories: reversal at the bottom and strengthening of industry trends or long-term logic. Based on this logic, he is relatively more optimistic about the flexibility of the Hong Kong stock market. Among them, medium- to long-term investment value in the technology sector is more prominent, and short-term pullbacks provide investors with better allocation opportunities. Xu Meng believes that, first of all, judging from the characteristics of momentum, the long-term momentum of core indices such as the Hang Seng Technology Index and the Hang Seng Index has maintained an upward trend over a period of one year. The current short-term pullback is in line with expectations. From the perspective of institutional allocation, this provides a good opportunity for intervention. Second, the fundamentals of the Hong Kong stock technology sector are clearly driven. “Hong Kong Stock Connect Technology brings together domestic AI core assets, covering leading companies in the entire industry chain, such as computing power, models, software applications, and hardware terminals. Moreover, if major domestic Internet companies participating in the global AI competition follow up in terms of capital expenditure and upstream and downstream layout, it is expected to catalyze a new round of technology markets.” Xu Meng said that the advent of DeepSeek will push Chinese technology companies to reposition their global competitive advantage, and the reshaping of confidence and mentality will push domestic and foreign investors to re-examine investment opportunities in China. Therefore, the valuation gap between China and the US technology stocks is expected to subside, and the valuation center is expected to move upward. Finally, in terms of capital, Xu Meng predicts that southbound capital is expected to continue to flow into Hong Kong stocks in 2026. Furthermore, Hong Kong stocks are a “bridgehead” for foreign investment into Chinese assets, and are highly correlated with overseas liquidity. The Federal Reserve began a new cycle of interest rate cuts in September 2025. Multiple signals indicate that the general trend of easing will continue in 2026. Therefore, under the resonance of the easing cycle between China and the US, Xu Meng believes it is expected to support Hong Kong stocks to maintain abundant liquidity.