BOCOM INTL: Hong Kong's stock market is expected to bottom out and stabilize in April, focusing on AI applications and intelligent driving.

BOCOM INTL released a research report stating that the main disturbance in the Hong Kong stock market in March did not come from the fundamentals, but from the uncertainty of the Middle East GEO Group Inc, putting pressure on the index in the absence of stabilizing conditions. If the conflict in April does not escalate further, the accumulated risk premium is expected to gradually dissipate, providing the market with valuation repair space. Hong Kong stocks are expected to transition gradually from a high-volatility oscillation phase to a phase of stabilization. BOCOM INTL pointed out that with the dissipation of the uncertainty premium of GEO Group Inc and the expectation of a catalyst from the upcoming meeting between the leaders of China and the United States, oversold technology stocks from the previous period have room for mean reversion and repair. The focus is still on leading Internet platforms with historically low valuations and continuous increase in share buybacks; attention is paid to AI applications, smart driving, and other categories with industrial catalysts. Furthermore, if the uncertainty of the Middle East GEO Group Inc persists, high oil prices will continue to provide direct profit support for the mainland energy sector, while gold will benefit from global risk aversion sentiment and pressure on the US dollar, maintaining a strategic overweight. If the uncertainty of GEO Group Inc decreases rapidly, it is recommended to reduce holdings of energy stocks and realize premiums. In addition, until external uncertainties have completely dissipated, high-dividend telecom operators, utilities, and bank stocks will continue to be core positions for southbound capital, holding and using them as portfolio volatility management tools, but gradually reducing allocation and reallocating to higher resilience after clear downward risk from GEO Group Inc. In terms of stock selection in April, BOCOM INTL recommends ZALL Smart Commerce (00778), HeSaige (02525), HUTCHMED (00013), Mengniu Dairy (02319), NVIDIA Corporation (NVDA.US), Broadcom Inc. (AVGO.US), and Sungrow Power Supply (300274.SZ), all with a "buy" rating. The target prices are 5.92 Hong Kong dollars, 269.66 Hong Kong dollars, 36.6 Hong Kong dollars, 21.51 Hong Kong dollars, 260 US dollars, 460 US dollars, and 220 Chinese yuan respectively.