Huatai Securities: Hong Kong stocks may see short-term rebound opportunities.

Last week, Hong Kong stock market trends continued to be dominated by overseas interest rate expectations. After an extreme one-sided pessimistic interpretation, Friday's U.S. non-farm payrolls came in far below market expectations, compounded by a rise in the unemployment rate, leading to a sharp decline in October rate hike expectations. The market may subsequently see a short-term recovery against the backdrop of the Southbound channel reopening on 10/8 and high-frequency National Day travel data filling the fundamental vacuum. However, it should be noted that the "higher for longer" interest rate center remains unmoved, and a trend reversal in macroeconomic policy and corporate earnings has not yet been confirmed. Therefore, a mid-term turning point may not have emerged yet. We recommend responding with structure and balancing offense and defense, rather than chasing beta. In terms of allocation, oil prices and U.S. Treasury yields remain the main constraints on the valuation recovery space for Hong Kong stocks. Dividend plays should continue to serve as the foundation of the portfolio, with primary allocation to operational assets such as railways, highways, and ports. Innovative drug and CXO leaders have superior fundamentals and benefit from China-U.S. resonance, and can continue to be held, with emphasis on stock selection and timing of profit-taking; overseas tech hardware sentiment is recovering but concentrated in a few giants with strong catalysts, while Hong Kong stocks are mainly focused on the domestic substitution chain, and a window for trend-following long positions still needs to be awaited.