Guosen: war evasion weakened, car industry stock prices and fundamentals repaired

Guosen has released a research report, stating that this week, the Hang Seng Index rose by +3.1% (compared to +0.7% last week), while the Hang Seng Composite Index increased by +3.4% (compared to +0.6% last week). In terms of style, small-cap stocks (Hang Seng Small Cap Index +4.1%) > mid-cap stocks (Hang Seng Mid Cap Index +3.7%) > large-cap stocks (Hang Seng Large Cap Index +3.3%). Most of the major concept indices rose. The largest increase was seen in Hang Seng Automobiles (+5.3%), while the largest decrease was in Hang Seng Biotechnology (-1.3%). Guosen overseas stock selection strategy portfolios all saw an increase, with the largest increase in the ROE strategy all-weather type (+3.2%). Guosen's main points are as follows: Stock performance: Overall significant rebound, healthcare and energy sector decline 26 industries rose, 3 industries declined, and 1 remained relatively stable. The major risers include: retail trade (+8.8%), machinery (+7.3%), electronics (+7.1%), electric power equipment and new energy (+6.8%), and national defense military industry (+5.7%); the major decliners include: coal (-3.5%), petroleum and petrochemicals (-1.2%), and healthcare (-0.4%). Valuation level: Most industries rebounded, internet sector showed significant increase This week, the Hang Seng Index valuation (dynamic expected 12-month P/E ratio) increased by +2.3% to 11.2x; the Hang Seng Composite Index valuation rose by +2.8% to 11.2x. The valuation of major concept indices all increased. The internet sector saw the largest increase (+3.7% to 15.6x). Guosen's overseas stock selection strategy portfolios saw an increase in valuation, with the ROE strategy all-weather type seeing the largest increase (+3.3% to 10.3x); the largest decrease was in the free cash flow 30 (-0.1% to 12.0x). 25 industries saw a rise in valuation, while 4 industries saw a decline. The industries with increased valuation include: steel (+11.5%), retail trade (+8.9%), machinery (+8.3%), construction materials (+7.2%), and electronics (+6.4%); those with decreased valuation include: basic chemicals (-8.2%), coal (-5.8%), petroleum and petrochemicals (-2.0%), and food and beverages (-1.2%). Performance expectations: Overall acceleration in upgrades, automotive industry rebound The Hang Seng Index's EPS (dynamic expected 12-month EPS) increased by +0.7% compared to last week's +0.2%; the Hang Seng Composite Index's EPS increased by +0.5% compared to last week's +0.4%. Most major concept indices saw upgrades in EPS expectations. The automotive sector saw the largest increase (+2.4%), while the biotechnology sector saw the largest decrease (-3.5%). Guosen's overseas stock selection strategy portfolios all saw an increase in EPS expectations, with the free cash flow 30 seeing the largest increase (+2.6%). 20 industries saw upgrades in EPS, while 7 industries saw downgrades and 2 remained stable. The industries with upgrades include: basic chemicals (+9.8%), coal (+2.4%), electric power equipment and new energy (+2.0%), automotive (+1.9%), and national defense military industry (+1.4%); those with downgrades include: steel (-8.6%), construction materials (-4.5%), healthcare (-2.4%), light manufacturing (-1.7%), and construction (-1.3%). Risk warning: Uncertainty in economic fundamentals, uncertainty in international political situation, uncertainty in US fiscal policy, uncertainty in Federal Reserve monetary policy.