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<Research>BOCI Raises Yr-end HSI Target to 25,700 as DeepSeek's Success Can Boost Valuation of CN Techs
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BOCI released a research report believing that Hong Kong stocks have a high chance for a valuation re-rating due to the success of China's domestic foundation model, DeepSeek, which boosted investors' confidence in China's future technology development. The Chinese government committed to continue to roll out more easing monetary and proactive economic policies, which led to a strong incline in Hong Kong equities in recent days. The broker believed that the success of DeepSeek will boost the valuation of Chinese techs, while the launch of DeepSeek model represents a milestone for China's technological development. BOCI saw significance of DeepSeek's success for Chinese tech firms, as DeepSeek managed to develop a low-cost but powerful foundation model despite US restrictions. Regarding the impact on China's stock market, BOCI believed that DeepSeek's success will significantly improve investors'' confidence on Chinese tech firms, and may increase the valuation of Hong Kong-listed tech companies, which may affect the re-rating of Hong Kong stocks. The broker decided to raise its end-December 2025 forecast for the HSI to 25,700 from 22,000, which is equivalent to a projected 2025 PE ratio of 11.7x. AAStocks Financial News |
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