Guosen: External constraints are expected to ease; seize the main line of Hong Kong stock valuation repair in Q4.

Guosen released a research report stating that the fourth quarter is the traditional off-season for crude oil demand, and oil prices are expected to trade lower, which may cause U.S. Treasury yields to flatten or decline temporarily. In addition, the RMB exchange rate continues to hover around 6.7 or even strengthen further, which will improve the international capital environment for Hong Kong stocks, and Meta muse opens up the imaginative space for personal Agent applications, and the valuation of major internet companies is relatively low, which also helps Hong Kong stock valuation repair. Sectors: 1. Major financials/high dividends: A high interest rate environment is relatively favorable for bank net interest margins, and valuations/dividends provide a buffer. Telecom operators have stable cash flow and are the stabilizers of the Q4 portfolio. 2. AI computing power hardware: China's AI infrastructure investment remains a relatively certain industrial trend, and profitability continues to improve, typically such as servers, PCB, optical fiber, and GPU. 3. Innovative drugs: The logic of BD going overseas remains, but it has shifted from a Beta market to individual stock Alpha. 4. Internet NETDRAGON leaders: Internet NETDRAGON leaders currently have low valuations, their AI businesses are beginning to show improvement, and there are opportunities for valuation repair. Domestic: September volume shrank, risk appetite declined In September, A-share turnover was 38 trillion yuan, significantly shrinking from 47 trillion yuan in August. Incremental funds stayed on the sidelines, pre-holiday risk aversion combined with quarter-end institutional position reduction, and buying support was insufficient. October is expected to be dominated by structural opportunities. In the future, first, pay attention to whether U.S. Treasury yields and overseas inflation data continue to disturb growth valuations. Second, track the implementation effects of real estate policies and the situation of domestic demand repair. From the perspective of capital structure, technology segments with strong earnings delivery and high-dividend defensive sectors may be relatively favored. United States: From rate cut expectations to reversal Entering September, under the influence of three major factorsthe resilience of the U.S. economy, sticky inflation, and energy shocksmarket expectations for rate hikes have been sharply raised from one hike after the Jackson Hole meeting to one hike this year and two next year. The labor market shows signs of weakening, but the unemployment rate is unlikely to touch the Sahm rule (4.6-4.7%) in the short term, so high interest rates will remain for some time. Q4 is often the off-season for energy use, so we judge that inflationary pressure may ease temporarily. In addition, two signals are worth tracking: the weakening of the S&P equal-weight index and the stagnation of large cloud companies. Reviewing the dot-com bubble, we found that the top formed by operators, large-cap stocks, and upstream equipment was a process lasting several quarters, so choosing the right sectors is more important than timing the broad market.