China CITIC Securities' strategy for Hong Kong stocks in 2026: The Hong Kong stock market will usher in the second round of valuation repair and performance recovery.

The research report of CITIC Securities stated that with the bottoming out of the fundamentals of the Hong Kong stock market and its still significant valuation discount, it is judged that the Hong Kong stock market will usher in a second round of valuation repair and further earnings recovery in 2026. It is recommended that investors grasp the five major medium and long-term directions: 1) the technology industry, including AI-related sub-tracks, consumer electronics, etc.; 2) the large medical sector, especially biotechnology; 3) benefiting from overseas inflation expectations rising and de-dollarization of resources, including non-ferrous metals and rare earths; 4) in the future, with the further recovery of the domestic economy, relatively stagnant and undervalued essential consumption sectors are also expected to undergo valuation repair; 5) benefiting from the appreciation of the renminbi, the paper and aviation sectors.