Guosen Securities Hong Kong Stock June Investment Strategy: The Hot IPOs Provide More Choices for Hong Kong Stock Investment

According to the Zhitong Finance APP, Guosen Securities has released a strategic research report stating that it expects the core inflation in the United States to rapidly rise to 3.8% in the third quarter, mainly due to tariffs driving up commodity prices. Investors are advised to be cautious of the volatility risks in the US stock and bond markets. The A-shares have shifted to a performance-driven logic, with sectors such as dividends and the CSI 500 receiving upward revisions in performance. Regarding Hong Kong stocks, the current recommendation from the firm is to hold, and no further accumulation is suggested above 22,500 points. Key focuses include cloud computing leader Tencent Holdings (00700), Alibaba-W (09988), as well as new consumption, pharmaceuticals, dividend sectors, and quality IPO targets. Guosen Securities' main viewpoints are as follows: United States: Expecting rapid rise in inflation in the third quarter According to the firm's calculations, starting from Q3, the core inflation in the United States will rise rapidly compared to Q2, reaching around 3.8% in the second half of the year. This is mainly due to the accelerated rise in core commodity prices caused by tariffs, while rent and services, even if stable or slightly declining, cannot offset this. Therefore, the firm believes that the market's current expectation of a core inflation level of 3.2-3.3 is still overly conservative. Based on this, the firm warns that both the US stock and bond markets will face significant volatility in the third quarter, and investors should plan ahead to cope with the impending uncertainties. A-shares: Performance differentiation after the first quarter report, performance-driven + undervaluation becomes the main line Since May, analysts have revised the performance of various broad-based indices for 2025, with the STAR 50 seeing a significant downward revision, while the sectors with upward revisions include dividends, the CSI 500, the Shenzhen Component Index, and the CSI 1000. In the rebound, performance and low valuation are positively correlated with stock prices, indicating that A-shares have shifted from emotion-driven dynamics in September last year and this year's Spring Festival to performance-driven dynamics. Hong Kong stocks: Hot IPOs provide more choices for Hong Kong stock investments The continuous upward revision of performance in the first half of the year, the increasing southbound capital, and the weakening US dollar index are all reasons supporting the medium to long-term strength of Hong Kong stocks. On the other hand, it is also necessary to consider the unexpected rise in US bond yields due to inflation and the uncertainties brought about by the trade war. Therefore, the firm tends to adjust strategies in a timely manner based on historical win rates. The current recommendation for Hong Kong stocks is to hold, and no further accumulation is suggested above 22,500 points. In terms of sectors, the firm has the following suggestions: Cloud computing direction: The leaders in cloud computing, Tencent and Alibaba, performed well in the first quarter report, both have competitive valuations, high index weight, and good liquidity; New consumption and pharmaceuticals: New consumption is characterized by a large young fan base, good global expansion potential through online dissemination, with significant short-term gains but still full of hope in the long term; pharmaceuticals are among the sectors with noticeable upward performance revisions; Dividend direction: Operators, banks, and public utilities have stable performance, which can effectively counter uncertainties; Opportunities in new stocks: This year, the IPO performance of Hong Kong stocks has been impressive, and it is advisable to consider the performance of IPOs after listing, with evidence showing that new stocks with a market value exceeding 30 billion have a median increase of 128% this year; Performance revision stock pool: Since the rise of Hong Kong stocks has always been strongly correlated with performance, attention should be paid to the pool of stocks with performance revisions Risk Warning: Uncertainty in geopolitical situations, uncertainty in U.S. tariff policies, uncertainty in the extent of overseas interest rate cuts, and uncertainty in the competitive landscape of certain industries