According to the Zhitong Finance APP, Zhang Yidong from Industrial Securities released a research report stating that in the second half of 2025, after the storm, there will be a rainbow, and the Hong Kong stock market will trend upward with fluctuations. In the first phase, before the Chinese economy fully digests the impact of tariffs, the Hong Kong stock market may maintain a &#34;bottom-lifting large box fluctuation&#34; pattern. In the second phase, after the Chinese economy has fully digested the impact of tariffs, as the effects of Chinese economic policies become evident, the Hong Kong stock market is expected to welcome improvements in both fundamentals and risk appetite, embarking on a journey to reach new highs.
Industrial Securities believes that under the influence of incremental funds, the investment trend of the Hong Kong stock market may lean towards &#34;A-share characteristics.&#34; Among them, &#34;military industry + technology + new consumption + new stocks&#34; is the spear, while &#34;gold + dividends&#34; is the shield. In terms of technology &amp; new consumption, growth investment needs to distinguish between trends and noise, and differentiate between true growth and themes. Technology and new consumption are the two main growth lines currently. From April to September 2025, there will be a peak period for the lifting of restrictions on shares. For true growth stocks, the adjustments brought by lifting restrictions and reductions in holdings are noise, presenting good buying opportunities.
Regarding the U.S. stock market, Industrial Securities pointed out that in the second and third quarters of 2025, the U.S. economy may face a downturn. The U.S. economy may have already entered a downward cycle by 2025. U.S. inflation remains persistently high, and the &#34;reciprocal tariff&#34; policy will further hinder the decline of inflation. In the second half of the year, U.S. Treasury yields may not significantly decrease. The U.S. stock market may face a double whammy of valuation and earnings declines, with global funds flowing towards high-quality assets that are less correlated with U.S. stocks. The risk premium in the U.S. stock market has not fully priced in the long-term uncertainties of U.S. assets.
The main points from Industrial Securities are as follows:
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<li>The turbulent period of international order reconstruction has arrived, and there may be three major opportunities for asset allocation.</li>
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Historically, asset allocation during the turbulent period of international order in the 1970s. The deepening of great power competition in the 1970s, the collapse of the Bretton Woods system, the failure of the Vietnam War, and the oil crisis marked the entry of the international political and economic order into a turbulent and reconstructive period. The super bull market in gold emerged, the U.S. dollar fell into a decade-long depreciation cycle, and the U.S. and European stock markets experienced a decade of stagflation in a &#34;non-bull market&#34; fluctuation, while the Japanese stock market significantly outperformed U.S. stocks.
The current international order has once again entered a turbulent period, and uncertainty will be the norm. The &#34;reciprocal tariff&#34; war initiated by the Trump administration essentially shifts the internal debt risks and social conflicts that are difficult to resolve outward. In the long term, the international order dominated by the U.S. over the past 30 years is being dismantled by the U.S. itself, and the U.S. dollar credit system will face deep-seated challenges.
During the turbulent period of international order, there are three major allocation opportunities to cope with &#34;uncertainty.&#34; 1) Gold, military industry, digital assets, etc., are strategic assets during the turbulent period of international order. 2) Opportunities related to technological innovation will be key to building a new global economic order that is &#34;inclusive and beneficial.&#34; 3) In the context of rebalancing country-specific asset allocation, there are opportunities for the revaluation of Chinese assets.
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<li>The U.S. stock market may face challenges in the second half of 2025, but it may not necessarily be negative for China.</li>
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Outlook for the U.S. economy in the second half of the year: In 2025, the U.S. economy may face a downturn in the second and third quarters. The U.S. economy may have already entered a downward cycle by 2025. U.S. inflation remains persistently high, and the &#34;reciprocal tariff&#34; policy will further hinder the decline of inflation. The policies of the Trump administration are filled with strong uncertainties, which may still lead to twists and turns in global trade negotiations, ultimately affecting the confidence of U.S. entrepreneurs and consumers
In the second half of the year, U.S. Treasury yields may be difficult to decline significantly. The Federal Reserve needs to make trade-offs between &#34;controlling inflation&#34; and &#34;supporting economic growth,&#34; and its attitude towards interest rate cuts may be more cautious than the market's consensus expectations. Considering that inflation in the U.S. remains sticky in the second and third quarters, the 10-year Treasury yield may have limited downward space.
U.S. stocks may face a double whammy of valuation and earnings in the second half of the year, with global funds flowing into high-quality assets that are less correlated with U.S. stocks. The risk premium of U.S. stocks has not fully priced in the long-term uncertainties of U.S. assets.
Three, China's capital market has great potential, with stable indices and structural bull markets.
The international environment is &#34;stable in the East and turbulent in the West,&#34; and the Chinese stock market will benefit from the new international order. Since 2025, the political and economic situation overseas has become increasingly turbulent, with China becoming a stable anchor for global economic growth. China is coordinating domestic economic work and international economic and trade struggles, responding to the rapidly changing external environment with the certainty of high-quality development. The Chinese stock market and economic expectations are forming positive feedback, with domestic and foreign investors' confidence in the Chinese economy and stock market improving.
Key structural highlights of China's asset revaluation—Technology + New Consumption. 1) New Consumption—service consumption, spiritual consumption, AI consumption, etc. Chinese policies focus on the supply of service consumption and support for the development of new consumption, with significant potential remaining in the service consumption sector. China is at the starting point of the &#34;spiritual consumption era.&#34; High-quality companies in the new consumption sector have strong growth attributes. 2) Collective breakthroughs in technological innovation have boosted national confidence, especially confidence in the country's destiny. After years of accumulation, relying on China's strong manufacturing capabilities and solid basic education, technologies represented by DeepSeek, robotics, sixth-generation fighters, and innovative drugs are emerging, showcasing China's strong comprehensive competitiveness.
Four, the new era of Hong Kong stocks: restructuring of the international order, illuminating the Pearl of the Orient; revaluation of Chinese assets driving a long bull market in Hong Kong stocks.
The deep logic of the Hong Kong stock market has changed—the central government is firmly consolidating and enhancing Hong Kong's status as an international financial center.
The ecological environment of the Hong Kong stock market has changed—the Hong Kong stock market is welcoming a wave of high-quality companies going public, with continuous inflows of new capital from both domestic and overseas. 1) Since 2023, the People's Bank of China, the China Securities Regulatory Commission, and other departments have successively introduced multiple policies to support companies going public in Hong Kong. The Hong Kong Stock Exchange, represented by FINI, has undergone institutional reforms that significantly enhance the market's capacity to absorb listings. 2) The wave of high-quality companies in the new consumption and technology sectors going public in Hong Kong injects fresh blood into the market.
This round of bull market in Hong Kong stocks will continue to benefit from the revaluation of Chinese assets, and the phoenixes attracted by the sycamore trees of technology and new consumption will surely come from around the world. 1) Looking back at history, Hong Kong can leverage its advantages as an international financial center to attract global investors with its high-cost-performance quality assets, promoting the revaluation of Chinese assets and potentially leading to a major bull market. From 2018 to 2020, high-quality new economy assets experienced an independent market trend. 2) Compared globally, Hong Kong stocks now have many growth-oriented consumer companies and technology and advanced manufacturing enterprises represented by artificial intelligence and robotics, offering high cost-performance
V. Investment Strategy: Strategically Long on Hong Kong Stocks in the New Era, Tactically Steady and Balanced in Offense and Defense
Market Outlook: In the second half of 2025, after the storm, there will be a rainbow, and Hong Kong stocks will trend upwards with fluctuations. 1) Phase One: Before the Chinese economy fully digests the impact of tariffs, Hong Kong stocks may maintain a &#34;bottom-lifting large box fluctuation&#34; pattern. Substantial progress has been made in China-U.S. trade negotiations; however, Trump's tariff policy has already impacted the U.S., China, and the global economy, and will continue to do so. The international economic and trade order will not return to the state it was in before April 2, 2025.
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<li>Phase Two: After the Chinese economy fully digests the impact of tariffs, as the effects of Chinese economic policies become evident, the Hong Kong stock market is expected to see improvements in both fundamentals and risk appetite, embarking on a journey to new highs.</li>
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Investment Style: Under the influence of incremental capital, the &#34;A-shareization&#34; of Hong Kong stocks may become a trend. 1) Incremental Capital Analysis: Domestic capital is gradually becoming the backbone of the Hong Kong stock market. Active domestic capital is an important incremental driving force for the Hong Kong stock market in 2025. Investment strategies from A-shares, such as thematic investments, new stock enthusiasm, and speculation on newly listed stocks, are spreading to Hong Kong stocks, enhancing market activity. In a low-interest-rate environment, long-term allocation funds such as insurance capital remain a significant force in buying Hong Kong stocks.
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<li>&#34;A-shareization&#34; of Hong Kong stocks will influence the approach to discovering investment opportunities and the investment rhythm. Firstly, it breaks the dull environment of &#34;Hong Kong stocks have no dreams,&#34; increasing investors' tolerance for the valuation of growth assets. Funds are no longer concentrated solely on high-certainty leading stocks but are spreading to second-tier leaders and small-cap stocks. Secondly, market speculation has intensified; as an efficient and convenient refinancing channel that allows short selling, thematic investments need to pay attention to the impact of chip structure and market risk appetite on stock prices.</li>
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Investment Opportunities: Balanced Offense and Defense, &#34;Military Industry + Technology + New Consumption + New Stocks&#34; as the spear, &#34;Gold + Dividends&#34; as the shield. 1) Technology &amp; New Consumption: Growth investment needs to distinguish between trends and noise, and between true growth and themes. Technology and new consumption are the two main growth lines currently. From April to September 2025, there will be a peak period for the lifting of restrictions on share sales. For genuine growth stocks, the adjustments brought about by lifting restrictions and reductions in holdings are noise, presenting good buying opportunities.
—— Investment Clues in Technology: First, AI drives growth in downstream applications, opening up the commercialization space for B-end SaaS ecosystems, while on the C-end, domestic internet giants are expected to gain a larger share in the competition for super traffic. Second, investment opportunities in the smart assisted driving-related industrial chain. Third, robotics. Fourth, innovative drugs.
—— Investment Clues in New Consumption: Trendy toys, gold jewelry, urban outdoor activities, new-style dining, domestic beauty care, trendy discount retail, OTA, gaming, etc.
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Gold &amp; Military Industry: Strategic assets in the era of global order reconstruction.
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Opportunities in New Stocks &amp; Newly Listed Stocks: The trend of emerging growth technology companies, new consumer brands, and advanced manufacturing enterprises going public in Hong Kong is continuing to heat up.
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Dividend Stocks: The dividend yield still holds appeal for allocation-type funds.
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Risk Warning: Risks of great power competition, risks of U.S. monetary policy exceeding expectations, risks of global economic growth slowing more than expected.

Zhang Yidong from Industrial Securities released a research report indicating that the investment in Hong Kong stocks may trend towards "A-share" characteristics, benefiting from the revaluation of Chinese assets. It is expected that in the second half of 2025, Hong Kong stocks will experience an upward fluctuation in two phases: first, a large box-shaped fluctuation with a rising bottom, followed by a dual improvement in fundamentals and risk appetite as the effects of economic policies become evident. Technology and new consumption are the current growth main lines, and adjustments brought about by lock-up expirations and reductions in holdings present buying opportunities. In terms of U.S. stocks, a downward cycle may be faced in 2025, with global funds flowing towards high-quality assets with low correlation

- The report from Industrial Securities predicts that Hong Kong stocks will experience an upward trend in the second half of 2025 after a period of adjustment.  
- Initially, the market may see a "bottoming out" phase as the Chinese economy absorbs tariff impacts, followed by improvements in fundamentals and risk appetite.  
- The report emphasizes the importance of sectors like technology and new consumption, while also highlighting potential challenges in the U.S. economy that could influence global investment flows.

Xingzheng's Zhang Yidong: Under the influence of incremental funds, Hong Kong stock investment "A-shareization" may become a trend