'Pin Zhongzi' It's不知不觉, today (25th) is already the Mid-Autumn Festival of the Horse Year. First of all, I wish all readers a happy Mid-Autumn Festival and smooth progress in everything.
　
　　Today is the Mid-Autumn Festival, meaning that the Horse Year has already passed for eight and a half months. At the beginning of the Horse Year, I recommended eight fortune-making stocks. The mid-year review should have been done earlier, but unfortunately, over the past one or two months, there were always some individual stocks worth my prompt commentary, thus the mid-year review has been delayed again and again, only to be finalized today.
　
　　Over the past eight and a half months, the performance of Hong Kong stocks can absolutely be described as lackluster. If counted by the Gregorian calendar, the performance of Hong Kong stocks in January this year was actually quite good. Driven by the artificial intelligence (AI) boom, the Hang Seng Index rose nearly 7% in January, a fairly decent start.
　
　　Who would have thought that the United States attacked Iran at the end of February, completely disrupting the entire investment landscape. More importantly, oil prices rebounded significantly, causing inflation pressure in the United States to reappear, leading the market to start worrying that the U.S. Federal Reserve would be forced to raise interest rates.
　
　　As a result, even though U.S. President Trump replaced the Fed chair with his preferred candidate, the decision to raise interest rates by 0.25 percentage points was ultimately made at the recent monetary policy meeting, initiating the interest rate hiking cycle.
　
　　Ironically, Powell, the former Fed chair whom Trump viewed as a thorn in his side, did not raise rates at the end of his term despite not cutting rates as Trump wished; instead, Walsh, whom Trump nominated, raised rates shortly after taking office.
　
　　Under the circumstances of global political and inflation uncertainty, the performance of Hong Kong stocks is truly disappointing. To some extent, Hong Kong stocks are particularly poor because major investment markets, including U.S. stocks, European stocks, and Asian markets, have all recorded gains after fluctuating, especially the Nasdaq, Japanese and Korean markets, as well as Taiwan stocks.
　
　　Looking back at the performance of Hong Kong stocks and Chinese stocks, it can truly be described as "high volatility, no gains." Moreover, after September, not only are there no gains, but the indices have gradually declined. The Hang Seng Index, based on the price when I wrote the fortune stock recommendations at the beginning of the year, has fallen about 7% to date, and the国企index has dropped nearly 9%.
　
　　Furthermore, only domestic bank stocks and pharmaceutical stocks have performed slightly better, still recording gains since the beginning of the year, while the majority of other sectors have declined, differing only in the extent of the decline.
　
*Lenovo stands out this year*
　
　　However, it is worth mentioning that one stock related to AI has performed exceptionally well this year (more precisely, from the second quarter onwards), accumulating an increase of about 2.8 times since the beginning of the year, far outpacing the rest. This stock is Lenovo Group (00992), engaged in computer manufacturing and sales.
　
　　After Lenovo announced its full-year results (Lenovo's fiscal year ends on March 31), I wrote a commentary in this column recommending readers to continue monitoring Lenovo.
　
　　In addition, this column recently recommended two AI infrastructure stocks, including Yangtze Optical Fibre and Cable (06869), which manufactures and sells optical fiber cables, and Zhongji Shuo Chuang (03308), the global leader in optical modules. The performance of these two stocks has been quite good, especially Yangtze, which rebounded almost double from its low in a short period.
　
*Remove Xiaomi, Alibaba, and Zijin*
　
　　Unfortunately, almost all eight fortune-making stocks I recommended at the beginning of the year have underperformed the market, with only CATL (03750) keeping pace with the market (compared to the Hang Seng Index; slightly outperforming when compared to the国企index). The worst performers are Alibaba (09988) and Xiaomi (01810), both of which I still gave a chance, with declines approaching 30%.
　
　　Another stock I didn't have good chemistry with in my recommendation is Zijin Mining (02899), which has fallen by about 25% since my recommendation (details in the attached table).
　
　　Over the past two months, the stock prices of Lenovo, Yangtze, and Zhongji Shuo Chuang, which I recommended in this column, have rebounded significantly or are already profitable (especially the first two). However, I believe that as medium-to-long-term investments, these three stocks still have potential for gains, and their valuations are not yet too expensive.
　
　　Therefore, I have decided to replace Alibaba, Xiaomi, and Zijin with Yangtze, Zhongji Shuo Chuang, and Lenovo in this mid-year review.
　
　　Finally, I would like to add and emphasize that I am still selecting stocks from the three directions of domestic demand, "slow bull," and AI. The newly added Yangtze and Zhongji Shuo Chuang are AI infrastructure stocks, while Lenovo combines AI concepts with domestic demand. The retained Tencent (00700), BYD (01211), and CATL are also in domestic demand and AI, China Life (02628) is domestic demand, and CITIC Securities (06030) represents the slow bull concept!
　　　
'Senior Analyst, Economic Information Daily, Law Kwok Sum'
　
*The signed and/or unsigned articles published in 'Economic Information Daily' reflect the authors' personal opinions and do not represent the stance of 'Economic Information Daily.' 'Economic Information Daily' plays the role of providing a free speech platform.