KGI: The Hang Seng Index is expected to reach 30,000 points by the end of the year. Recommended stocks include XPeng, UBTECH ROBOTICS, Tencent, Alibaba, and 12 others

KGI Securities released a global market outlook indicating that in terms of macroeconomics for the mainland and Hong Kong markets, with trade agreements reached among multiple countries, risks have receded. However, due to external drag, it is expected that China's GDP real growth will slightly slow to 4.6% this year. This year, the Hong Kong and mainland investment markets are advised to focus on four core areas.

KGI's Chief Investment Officer, Liang Qitang, stated that this year is a critical turning point for the Chinese economy. Although the market expects GDP growth to slow to 4.6%, "new productive forces," such as humanoid robots, are stepping in to become new growth engines. The most crucial signal from the market is that funds are "waking up," with substantial savings flowing from low-interest fixed deposits into the capital markets seeking returns. With risk appetite returning and policies gaining momentum, now is the best time for investment strategies to shift from defense to offense. Driven by both valuation recovery and profit growth, KGI is optimistic that the Hang Seng Index will reach 30,000 points by the end of the year, and the allocation value of Hong Kong stocks and A-shares has fully re-emerged.

KGI holds an optimistic view on the prospects of the Hang Seng Index, expecting that interest rate cuts by the Federal Reserve will drive funds back into Hong Kong and A-shares. Based on the expected price-to-earnings ratio adjustment to 13.5 times and an 8% profit growth to reflect the influx of funds into Hong Kong and A-shares, the target for the Hang Seng Index by the end of this year is set at 30,000 points, representing a potential increase of about 14%. As confidence is restored, investment styles are expected to shift from defensive to offensive. KGI recommends 12 major stock picks, including XPeng (09868.HK), UBTECH ROBOTICS (09880.HK), Tencent (00700.HK), Alibaba (09988.HK), CHINAHONGQIAO (01378.HK), AIA Group (01299.HK), Ping An Insurance (02318.HK), China Merchants Bank (03968.HK), CanSino Biologics (09926.HK), Pop Mart (09992.HK), Tencent Music (01698.HK), and Sino Land (00083.HK).

Liang Qitang believes that with interest rates in Hong Kong trending down and rental prices for properties showing considerable increases, the valuations of real estate industry stocks are attractive and worth the market's attention. He expects that property prices in Hong Kong will rise by 5 to 10% this year.

In the Chinese consumer sector, Liang Qitang pointed out that domestic demand has established itself as the core of growth, contributing over half of GDP. As the "trade-in" effect diminishes, it is expected that the central government will implement the "14th Five-Year Plan" and economic conference plans, launching a new round of subsidies covering cultural, entertainment, and sports sectors to continuously boost resident consumption. In terms of the financial market, risk appetite is increasing. Given the narrowing spread between bond yields and fixed deposit rates, substantial savings are flowing into the capital markets seeking returns. The fundamentals of the banking and insurance industries are bottoming out, and the credit structure is accelerating its shift from real estate to support the real economy.

Regarding the "anti-involution" topic, PPI remains weak, and capacity reduction has become a focus. Compared to 2015, this round involves more downstream private enterprises and needs to consider employment, presenting greater challenges. Industry consolidation is expected to take time, but the impact is controllable, benefiting long-term healthy development.

Concerning new productive forces, this will replace real estate and old infrastructure as the main axis of investment. Digital infrastructure supports AI and embodied intelligence, and humanoid robots are expected to usher in a commercial "iPhone moment" this year. Innovative leaders with core technological autonomy will enjoy higher valuation premiums As for the Singapore market, Chen Guangzhi, the head of research at KGI Singapore, pointed out that due to the easing of trade tensions and the momentum driven by artificial intelligence, Singapore achieved significant economic expansion last year. The government's proactive measures provided strong support for the bull market in the stock market, and this strong momentum is expected to continue, bringing an optimistic economic outlook for this year