CITIC Securities: The Hong Kong stock market is expected to usher in a recovery trend in 2027

In 2026, H Kong stocks will be dragged down by weak domestic demand profitability and liquidity pressure, presenting a 'performance + valuation' double whammy. Looking ahead to 2027, H Kong profitability is expected to grow moderately, with the Hang Seng Index and Hang Seng Composite Index projected to rise by 7.4% and 9.9% respectively, while the Hang Seng Tech Index accelerates to 24.8%. Consumption and technology will replace cycles as the main growth drivers; overseas interest rate hike expectations are fully priced in, with the Federal Reserve potentially restarting rate cuts in the second half of the year, easing discount rate pressure. However, funding unlocking and slowing southbound capital inflows will keep the fund environment tight in the first half of 2027.