Interest rate cuts have arrived as expected, but to stimulate consumption and investment, more importantly, expectations need to be reversed. For example, if you want everyone to enter the market to buy low, first, there must be a turning point in the macro environment, and second, the valuation must be cheap enough.
In terms of valuation, if we refer to the Hong Kong stock market, in recent years, the focus has shifted from looking at PEG, PS ratios for growth stocks to gradually looking at lower PE ratios, then to low PB ratios, and more recently, using dividends as an anchor. In comparison, A-shares indeed have the potential to stimulate investors' desire to buy low.
Hong Kong stocks are supported by buybacks and dividends, making them naturally more attractive. However, attention should also be paid to large-cap stocks. Ultimately, it all comes down to domestic demand. Without expanding overseas, there will be concerns, especially in the advertising industry. If domestic consumption continues to falter, the impact will eventually be felt.
Of course, successful overseas operations may not necessarily lead to higher valuations. For example, Pinduoduo's Temu GMV reached 20 billion USD in the first half of the year, surpassing last year.
With the introduction of semi-custodial services and the growth in scale, it is believed that Pinduoduo's losses will continue to shrink, and there is a possibility of achieving a balance between profits and losses by the end of the year. Currently, Pinduoduo's valuation has dropped to single digits. Even considering regulatory risks in the United States and Europe, the valuation is still pitifully low. However, from another perspective, the domestic business has become more stable. Yet, the management does not consider buybacks or dividends, which is largely due to the long-term low valuation

Hong Kong Stock Market Review: Major Adjustment