Aberdeen Investments: Still cautiously optimistic about Chinese technology stocks in the medium term, the impact of high US long-term bond interest rates on Hong Kong stocks is manageable

The Zhitong Finance App learned that the results of Chinese technology stocks have been broadly announced. Chu Mingyu, investment manager of Aberdeen Investments in China, said in an exclusive interview that he is still cautiously optimistic about the sector in the medium term, but it is expected that individual stock performance will diverge. The AI investment theme is gradually shifting from models, computing power, and capital expenditure to commercialization and profit realization. After the results, we should focus on: (1) whether future profit forecasts will be raised; (2) whether the revenue and profit growth brought about by AI can support corresponding capital expenses; (3) whether the core business is under continuous pressure from industry competition or the macro environment.

Chu Mingyu pointed out that the core business of Chinese technology stocks is generally stable, and AI and cloud computing are becoming new growth drivers, but many technology leaders have significantly increased AI capital expenses, putting pressure on short-term profits and free cash flow. Therefore, in the next step, the market will pay more attention to whether these investments can be converted into actual income, profits, and cash returns.

In terms of stock selection, he said that priority should be given to platform leaders with stable core businesses, real AI application scenarios, clear return paths on capital investment, and reasonable valuations.

Interest on US long-term bonds continues to be high. Chu Mingyu indicated that this will increase corporate financing costs and the discount rate of stock valuations, putting some pressure on global stock markets, especially those with high valuations and profits concentrated on future growth stocks. However, he believes that the impact on Hong Kong stocks is still manageable. The main reason is that the valuation of Hong Kong stocks is not high. Some leading internet and consumer companies have already gone through deep adjustments earlier, and negative factors in interest rates and fundamentals have been reflected to a certain extent. It is expected that the market will be dominated by broad shocks in the future.

He pointed out that compared to changes in interest rates, the mid-term performance of Hong Kong stocks will be more dependent on improved fundamentals and profit growth, and individual stock performance will be further divided. If the Mainland's macroeconomic policy support increases and results gradually come to fruition, consumption and corporate profits improve, and AI investment starts to translate into actual profit returns, Hong Kong stocks still have room for further recovery.