The recent pessimistic sentiment in the Hang Seng Tech Index in Hong Kong stocks has seen some recovery. We believe there are mainly the following reasons:
1. The pandemic in places like Xi'an has made the market fully aware of the extremely important role that the market economy plays in optimizing resource allocation.
The distribution systems of companies like Meituan, Ele.me, and Freshippo have effectively met market demands with rapid and efficient allocation. Over the past two decades, China's internet companies have played a crucial role in improving social operational efficiency, which we cannot simply deny. Although currently under antitrust measures, the government (ZF) is intentionally guiding internet companies to invest in long-term hardcore technology fields, impacting their short-term performance, but we cannot deny the value these internet companies have brought to the entire society over the past decade.
2. Overseas investment banks have recently started to intensively upgrade their buy ratings for Chinese internet companies listed abroad. Charlie Munger’s purchase of Alibaba also gives the market expectations of a rebound after hitting the bottom;
3. Things turn around when they reach an extreme. We cannot say that Hong Kong tech stocks have reversed, but a short-term recovery should be highly probable.
$BABA-W (09988.HK)$ $TENCENT (00700.HK)$ $KUAISHOU-W (01024.HK)$ $MEITUAN-W (03690.HK)$ $JD-SW (09618.HK)$ $XIAOMI-W (01810.HK)$