Hong Hao: The Hengke Index is still hovering and will rebound for a few days in the short term, but the high valuation of individual stocks is still not cheap enough and not worth holding for the long term According to Golden Finance, on July 9th, Hong Hao, a well-known strategic analyst and Chief Investment Officer of Lianhua Asset Management, shared his latest observations and judgments on the increasingly divergent pattern between the Hong Kong IPO market and the secondary market in an interview with foreign media on July 6th. The key points are as follows: 1. The funds traditionally reserved for the secondary market are now pouring into the IPO market to "innovate", and many new stocks have indeed performed very well, rising several times on the first day of listing. We will not be surprised by this outstanding performance in the coming months. Therefore, I believe that the IPO market is still attracting all attention, while the Hang Seng Technology Index is still hovering. 2. This is a significant risk when it comes to the wave of lifting restrictions. The reason why many IPOs perform well is that retail investors have very limited circulating stocks. This can easily lead to price manipulation and squeeze individual investors. Therefore, once these locked in stocks are fully tradable and increase the circulation of retail stocks, I believe selling pressure will come. Moreover, many stocks have performed too well, and shareholders have a strong drive to take profits. 3. The Hong Kong market index is mainly software and Internet platform companies, such as Alibaba and Tencent. I think many of these stocks are considered 'outdated' as they have not actively participated in AI and are therefore lagging behind in the AI field. If you look at some AI related stocks, their market value is quite astonishing. Once the lock up period ends and these unlocked shares become freely tradable, it will put pressure on many of these high priced stocks. 4. I think the Hong Kong market was oversold last week. For example, the Hang Seng Index has fallen to a level not seen in many years, around 22000 points. At present, the valuation of the Hong Kong Stock Exchange stock index is only about 10 times, which is not the lowest in history, but it is also one of the cheapest. So I think people are trying to find value in these oversold stocks. 5. Last week's rebound, in my opinion, is better classified as a technical rebound. Because if you look at the relative strength indicators and the wave structure of the Hang Seng Index, it has already reached a level favorable for a rebound. I think the rebound will continue for a few more days, and then people may come to their senses and realize that perhaps these stocks are still not cheap enough and not worth holding for the long term. 6. Many mainland companies are choosing to list in Hong Kong. I think many company owners tend to liquidate (reduce) their holdings of stocks after going public, so this is a new trend that everyone needs to pay attention to. Because many of these stocks are overvalued and severely overbought, I believe even the company owners themselves may not be able to see a clear future prospect that can support such high valuations, so many of them actually choose to exit ownership. 7. I think currently, due to the effectiveness of the 'new product' strategy this year, this momentum will continue for some time, but I believe that value will eventually return and people will return to common sense. (Gelonghui)