GO
| HSI1 | 26,389.04 | +0.60 | 306.70B |
| HSCEI1 | 8,858.63 | -17.75 | 113.18B |
| Back Zoom + Zoom - Block Traded | |
|
2026-05-14 16:28:18 Citi remained cautiously optimistic on the outlook for the China equity market in 2H26, favoring the tech and export sectors, and upgraded the insurance sector from Neutral to Overweight. The broker forecast insurers to benefit from higher investment income from equities and inflows from bank deposits into insurance products. Citi set its end-2026 targets for the HSI, CSI 300 Index and MSCI China Index at 29,600 (down 1.3% from the previous 30,000), 5,600 and 92.0, respectively, and introduced a 1H27 target of 30,500 for the HSI. Given the heavier weighting in tech stocks and more ample liquidity in the A-share market, Citi preferred A-shares to H-shares in 2H26. In terms of sector allocation, Citi maintained Overweight on the tech, basic materials, healthcare and internet sectors, but lowered the weighting of the internet sector by 5.3 ppts to 36.5% owing to slowing earnings growth. The broker also raised the weighting of the financial sector by 1.6 ppts to 12.1%, citing strong IPO pipelines and robust market turnover in Hong Kong. Citi noted that its 2026 EPS growth forecast for the HSI accelerated to 9.9% YoY, stemmed from the energy and raw materials sectors, while forecasts for the tech, internet and automobile sectors were revised down. XIAOMI-W (01810.HK), BABA-W (09988.HK) and MEITUAN-W (03690.HK) were identified as the main contributors to lower earnings adjustments. At the stock level, Citi updated its Top Buy list for H-shares, retaining TENCENT (00700.HK) (TP HKD783), AIA (01299.HK) (TP HKD103), HENGRUI PHARMA (01276.HK) (TP HKD134) and Trip.com Group Limited (TCOM.US) (TP USD82). It added MMG (01208.HK) (TP HKD11.2), CICC (03908.HK) (TP HKD27.66), MONTAGE TECH (06809.HK) (TP HKD305) and ASMPT (00522.HK) (TP HKD180), replacing certain hardware names and Zijin Mining. In addition, Citi analyzed the potential impact of easing Middle East conflicts on Hong Kong-listed stocks. Downstream consumption, industrial and utilities names such as SHENZHOU INTL (02313.HK), YUE YUEN IND (00551.HK), HENGAN INT'L (01044.HK), POP MART (09992.HK), SAMSONITE (01910.HK), CTF SERVICES (00659.HK) and ENN ENERGY (02688.HK) may benefit from lower energy and logistics costs. By contrast, auto stocks including BYD COMPANY (01211.HK), GEELY AUTO (00175.HK) and GWMOTOR (02333.HK) may face pressure as ebbing oil prices could weaken demand for NEVs. Citi's H-share Top Sell list includes HUANENG POWER (00902.HK) (TP HKD4.6), CHINA RES POWER (00836.HK) (TP HKD17.5), HUISHANG BANK (03698.HK) (TP HKD4), BYD ELECTRONIC (00285.HK) (TP HKD22.6), SJM HOLDINGS (00880.HK) (TP HKD1.8), CHERVON (02285.HK) (TP HKD17.5) and CR MEDICAL (01515.HK) (TP HKD2.6). ~ AASTOCKS Financial News Website: www.aastocks.com | |