Broker Name: DBS Bank (Hong Kong) Limited
Date of Report: 3 February 2026
Excerpt from DBS Bank (Hong Kong) Limited report.
- Return of volatility but positive outlook: Despite heightened volatility in early 2026 due to Fed leadership changes and a precious metals market rout, DBS maintains a positive stance on China and Hong Kong equities, with a Hang Seng Index target of 30,000, supported by resilient earnings, stable macro trends, and sustained capital inflows.
- Key reasons for optimism: The positive view is anchored on recalibrated (not reversed) liquidity expectations, stable Chinese economic growth with emerging green shoots, a firmer RMB enhancing asset attractiveness, improving corporate earnings, attractive valuations with lighter investor positioning, and a thaw in US-China and global relations.
- Sector and stock picks: The report highlights preference for sectors like technology, insurance, and selected materials, recommending blue-chip laggards (e.g., Tencent, CATL), HK recovery proxies (e.g., Wharf REIC, HKEx, HSBC), and future tech champions (e.g., Lens Tech).
- Market performance and positioning: Property and bank stocks show resilience; tech hardware lags due to rising costs. Global funds retain underweight positions in China, presenting a potential for further inflows amid attractive valuations.
- Sector reviews and top picks: Positive on China insurers, materials (aluminum, battery), internet, and tech hardware. Neutral on autos, banks, and developers. Negative on aviation, property developers, and oil/gas due to sector-specific risks.
- Key investment themes: Accumulate lagging quality leaders, capitalize on Hong Kong’s economic revival, and focus on emerging technology trends, especially AI and hardware upgrades.
- Highlighted stocks with upside: Alibaba, BYD Electronics, CATL, Chalco, China Construction Bank, China Mobile, HKEx, Ping An, Tencent, Wharf REIC, among others, are identified as top picks based on sectoral outlook and upside potential.
- Risks and disclosures: The report details potential macro, policy, and geopolitical risks, and includes standard broker disclaimers and disclosures regarding research objectivity and possible conflicts of interest.
Above is an excerpt from a report by DBS Bank (Hong Kong) Limited. Clients of DBS Bank (Hong Kong) Limited can be the first to access the full report from the DBS website: https://www.dbs.com.hk
