CICC Liu Gang: Maintains Hang Seng Index Center at 26,000; Tech Index Offers Odds Value but Upside Constrained by Fundamentals
Taylor Wilson
CICC strategist Liu Gang reiterates a 26,000-point fair value for the Hang Seng Index, arguing the broad China-HK market will track mainland credit cycles sideways; Hang Seng Tech is cheap enough to limit downside, but turning into a "good trade" still requires earnings, policy, and AI capex to align.
Why is the HSI "locked" around 26,000?
Liu Gang's core framework: China-HK broad indices roughly track the mainland credit cycle — how aggressively banks lend and corporates borrow.
CICC expects the credit cycle to stay range-bound, with no major expansion. This means → the HSI's upside is capped, with its center of gravity pinned at roughly 26,000 points.
In plain terms = if credit doesn't expand, the market can't stage a systematic rally — the index will likely oscillate around current levels.
Hang Seng Tech — what separates a "not-bad trade" from a "good trade"?
Liu Gang calls the current setup "not a bad trade": valuations have compressed to low levels, limiting further sharp downside and offering odds value.
To upgrade to a "good trade," three conditions must be met simultaneously: ① a material improvement in corporate earnings ② policy pivoting toward consumer stimulus ③ internet giants ramping up AI investment.
Additionally, a rapid decline in U.S. Treasury yields would lower overall funding costs and support the tech index. This means → cheap valuation alone isn't enough — fundamentals have to genuinely improve.
Why do long-horizon and short-horizon funds view Hang Seng Tech differently?
For long-duration capital with low cost-of-carry — such as insurance funds — Liu Gang sees a case for gradually building positions in the tech index and waiting for returns to materialize.
But for mutual funds chasing relative performance, even a flat tech index carries opportunity cost — the same capital deployed elsewhere might generate better returns.
In plain terms = deep-pocketed, patient money can start buying now; money that must beat peers each quarter needs more than "not losing."
HK tech giants are investing in AI — why are they still lagging global peers?
Liu Gang breaks the underperformance into two layers. First, global hyperscalers — Microsoft, Amazon, Google and their peers that sell cloud and build AI infrastructure — have performed only modestly of late; the recent U.S. AI rally has been concentrated in hardware stocks.
Second, drawing on the U.S. experience, AI's commercial edge lies in B2B (business-to-business); HK-listed internet giants are mostly positioned in B2C (business-to-consumer) AI applications, a longer path to monetization.
The lingering overhang of the food-delivery price war adds further drag. This reflects a gap between narrative and reality: HK tech's AI story is loud, but capital favors the certainty of hardware and B2B.
What is the real "verification checkpoint" for Hang Seng Tech?
Liu Gang is explicit: whether the tech index can upgrade from "odds value" to a "good trade" ultimately depends on whether corporate earnings show material improvement.
That checkpoint has not arrived — the market is still waiting for data, not reacting to a confirmed inflection.
In plain terms = cheap doesn't mean it will rise. Companies need to actually earn more before the valuation shifts from "won't lose" to "will make money."
Content is for reference only, not financial advice.