Hong Kong stocks, confirmed at the bottom, climb up the ladder along the molecular end.

The bottom of Hong Kong stocks (the platform position in mid-December last year) may have been confirmed under multiple logical verifications. In this FOMC meeting, from the denominator side or reconfirmation of the bottom of the Hong Kong stock market, the superimposed numerator side has shown a rebound trend, and Hong Kong stocks can be deployed along the numerator side in the future. It was previously emphasized that this bottom should be supported by logic/funds. First, the two main rounds of rising waves before mid-December were all driven by internal factors (real estate + epidemic prevention + platform economy). There were not too many overseas easing expectations. Second, at the capital level, before mid-December, it was driven by short positions + hedge funds covering, and hedge funds increased their positions in China to historical highs after January. Configuration: Q1 performance and the sector with higher interest rate sensitivity are expected to rise.

Factset's Hong Kong stocks' full-year corporate earnings are expected to grow by 11% in March. In recent months, with China's recovery process, it has been approaching the 19% profit growth forecast.

The difference may be: 1) The annual economic growth target is around 5%, and the market may lower expectations to restore the Soviet Union; 2) The market is still relatively pessimistic about exports. However: 1) The transaction area of commercial housing in 30 cities has increased by 23.45% year-on-year in the past four weeks, so it may not be too pessimistic about the slope of domestic demand; 2) China's exports from January to February exceeded Wind's consensus expectations & US PMI in March exceeded Bloomberg's consensus expectations, so Or should not be too pessimistic about external demand. After Credit Suisse, Deutsche Bank's market performance (stock price, CDS, etc.) has also experienced disturbances recently. However, we observe the major bank financial indicators (Factset) and their related hands are relatively stable. The impact of the Deutsche Bank crisis may be limited.

The current market value disclosure rate of the 22nd annual report of Hong Kong stocks (disclosed annual report individual market value/total market value) is about 53%. The net profit growth rate attributable to the parent is about 3.3%, slightly higher than "Hong Kong stocks: China's recovery process may be the core expectation difference" (23.1. 15) Medium -0.6%, lower than 21.3% in 21 years. In terms of industries, pharmaceuticals (270%), transportation (176.5%), and retail (86.2%) have a relatively high growth rate of net profit attributable to the parent in 22 years, while transportation (791%), retail (111%), and consumer services (98% ) ΔG is higher (growth of net profit attributable to parent in 22 years - the growth rate of net profit attributable to parent in 21 years). In 1Q23, analysts raised their overall bottom-up 23E profit forecasts for Hong Kong stocks by about 0.5% (choosing companies with 23E net profits attributable to their parents on 22.12.31 and 23.3.26 as the target pool), of which: pharmaceuticals (13%), consumption Consumer services (7%), energy (3%), media (3%), software (3%) 2023E profit forecasts have been revised up significantly.

According to the current Bloomberg (OIS) implied interest rate hike path, the market pricing ECB may be hawkish until July, and then slowly dovish vs. FED will start to become dovish after May, and the interest rate difference between the US-European policy rate during the year The trend converges throughout the year. The implicit logic here may be: For the Eurozone (E.Z.), in the first half of the year: banking turmoil that will not cause systemic risks → ECB still or relatively hawkish monetary policy; in the second half of the year, with the impact of interest rate hikes & energy shocks slowing, E.Z. may enter the recovery range. In addition, China's recovery also has a pulling effect on the E.Z. economy, and China's annual recovery is still likely to exceed expectations. For the U.S.: The trading focus of the U.S. bond market may be changing from economic data → financial risk (note that the Fed was still expanding its balance sheet last week). The poor pace of monetary policy may point to a weaker DXY trend.

First, pay attention to the sectors that are expected to improve in Q1 performance: Hong Kong stock Internet: games (the number of domestic game approvals in March continued to remain at a high level (86)), e-commerce (the cumulative retail sales of e-commerce in February was 6.2% year-on-year, compared with the previous value up (4% in December)). Real estate chain: Real estate: The accumulated sales area of commercial housing in February was -3.6% year-on-year, which was a rebound from -24.3% in December; the transaction area of commercial housing in 30 cities was 34% year-on-year in the first three weeks of March, a sharp rebound from about -14% in January-February. Building materials: The completed area of the flagship index housing increased by 8% year-on-year in February, a significant increase from -15% in December. Furniture retail (domestic sales): Furniture retail sales increased by 5.2% year-on-year in February; the export value of furniture and parts decreased by -24.9% year-on-year in February. Second, pay attention to those with high-interest rate sensitivity: Hong Kong stocks Internet and technology hardware and equipment.

Risk warning: The recovery of the domestic economy could be better; the Fed's water collection has exceeded expectations.