Citi has released a report forecasting the adoption of moderate stimulus policies by the government to bolster the local economy. These policies are anticipated to have a substantial impact on the consumption, internet, resources, and technology sectors. The report underscores that the valuation of mainland and Hong Kong stock markets remains modest, slightly under the historical average, prompting the bank to adopt a constructive stance. Consequently, Citi has upgraded its rating for the consumption sector to "Overweight," favoring investments in local enterprises poised to benefit from government stimulus measures. Conversely, amidst rising US trade tariffs, the bank has downgraded its rating for the transportation sector to "Neutral." Additionally, Citi expresses optimism towards large internet stocks and technology stocks supported by favorable government policies. Regarding market indices, Citi has revised upwards its year-end target for the Hang Seng Index to 25,000 points, with an ambitious mid-year target of 26,000 points for next year. Similarly, the year-end target for the MSCI China Index has been raised to 79 points, with a mid-year target of 82 points for the following year. In the realm of H-shares, Citi has identified Tencent, Huaneng Power International, BYD, AIA, and Anta Sports as its top buy recommendations.
