CITIC Securities has released its 2027 Hong Kong stock market investment strategy research report. The report notes that in 2026, Hong Kong stocks were weighed down by weakening domestic demand earnings and liquidity pressures, suffering a double blow to both performance and valuation. Looking ahead to 2027, Hong Kong stock earnings are expected to grow moderately, with the Hang Seng Index and Hang Seng Composite Index forecast to grow 7.4% and 9.9% respectively, while Hang Seng Tech growth is expected to climb to 24.8%, with consumption and technology replacing cyclicals as the main incremental drivers. Expectations of overseas rate hikes have been fully priced in, and the Federal Reserve may restart rate cuts in the second half of the year, easing discount rate pressure; however, lock-up expirations and a slowdown in southbound capital inflows will keep liquidity conditions relatively tight in the first half of 2027. Currently, the trailing P/E ratios of the Hang Seng Index and Hang Seng Tech stand at 9.67x and 13.1x respectively—both at historical lows—and policy support and connectivity reform are expected to underpin a recovery. In terms of allocation, a balanced approach between growth and dividend income is recommended: for growth, focus on four major areas—biotechnology, AI applications, intelligent driving, and embodied intelligence; for dividend income, use bond-like assets as a stabilizer while also capturing dividend growth.