Guosen: Hong Kong stock market oscillates and repairs, funds flow into internet and finance sector.

Guosen released a research report stating that this week, the Hang Seng Index rose by 2.3% while the Hang Seng Tech Index fell by 0.3%. The Hong Kong stock market saw a volatile recovery, with the financial sector leading the gains as the Hang Seng Financials increased by 4.6%. There was a slight inflow of funds into the internet and financial sectors, with the overall daily average fund intensity for the Hong Kong stock connect reaching +3.3 billion Hong Kong dollars per day, compared to -42.3 billion Hong Kong dollars per day last week. The overall forecasted EPS for the market was revised upwards by 0.2%, compared to a decrease of 0.4% last week. The industries that saw upward revisions include steel (+2.4%), power equipment and new energy sources (+1.2%), building materials (+1.1%), automobiles (+1%), and defense and military (+0.8%). Guosen's perspective is as follows: Stock performance: Volatile recovery in the market, with the financial sector leading the gains This week, the Hang Seng Index rose by 2.3% while the Hang Seng Tech Index fell by 0.3%. In terms of style, the performance was as follows: large caps (Hang Seng large cap +2.5%) > mid caps (Hang Seng mid cap +0.7%) > small caps (Hang Seng small cap +0.6%). Concept indices showed some differentiation, with increases in the Hang Seng Financials (+4.6%), Hang Seng Hong Kong 35 (+4.1%), and Hang Seng Utilities (+3.8%); while decreases were seen in Hang Seng Automobiles (-1.7%). Within the Hong Kong stock connect industries, 18 industries saw increases while 12 industries saw decreases. The top gainers included commerce and retailing (+5.2%), non-bank financials (+4.7%), textiles and clothing (+4%), banking (+3.8%), and petroleum and petrochemical (+3.7%); while the top losers were electronics (-4.8%), consumer services (-4.1%), defense and military (-2.6%), automobiles (-2%), and light manufacturing (-1.9%). Funds intensity: Inflow of funds into the internet and financial sectors This week, there was a slight inflow of funds, with the overall daily average fund intensity for the Hong Kong stock connect at +3.3 billion Hong Kong dollars per day, compared to -42.3 billion Hong Kong dollars per day last week. The average over the past 4 weeks was -12.8 billion Hong Kong dollars per day, and +3.4 billion Hong Kong dollars per day over the past 13 weeks. In terms of industries, funds inflow was seen in 20 industries, outflow in 9 industries, and neutrality in 1. The top inflows were in commerce and retailing (+1.7 billion Hong Kong dollars per day), media (+1.3 billion Hong Kong dollars per day), non-bank financials (+0.9 billion Hong Kong dollars per day), banking (+0.6 billion Hong Kong dollars per day), and non-ferrous metals (+0.6 billion Hong Kong dollars per day); while the top outflows were in electronics (-1.7 billion Hong Kong dollars per day), consumer services (-0.7 billion Hong Kong dollars per day), automobiles (-0.5 billion Hong Kong dollars per day), computers (-0.2 billion Hong Kong dollars per day), and agriculture, forestry, animal husbandry, and fisheries (-0.1 billion Hong Kong dollars per day). Earnings forecast: Market returning to an upward EPS revision state This week, the overall market EPS forecast was revised upwards by 0.2%, compared to a 0.4% decrease last week. Structurally, 24 industries saw upward revisions in EPS forecasts, while 4 industries saw downward revisions and 1 remained neutral. Industries with upward revisions include steel (+2.4%), power equipment and new energy sources (+1.2%), building materials (+1.1%), automobiles (+1%), and defense and military (+0.8%); while those with downward revisions include petroleum and petrochemicals (-0.5%), commerce and retailing (-0.2%), machinery (-0.1%), and non-ferrous metals (-0.1%). Risk warning: Uncertainty in economic fundamentals, uncertainty in international political situations, uncertainty in US fiscal policy, and uncertainty in US Federal Reserve monetary policy.