Daily Investment Strategy
Daily focus：Xiaomi（1810）
In the face of potential tariffs, the enhancement of policies to promote domestic demand to counteract the impact of Trump 2.0 will be the main theme in coming years. Earlier, on January 8, the National Development and Reform Commission (NDRC) and the Ministry of Finance announced a large-scale equipment renewal and trade-in policy for consumer goods to be implemented in 2025. Xiaomi can be directly benefitted. Recently, IDC indicated that starting from the fourth quarter of 2024, the Chinese smartphone market is steadily recovering, with the pent-up demand for device upgrades over the past three years gradually being released. This new policy is expected to further accelerate consumer upgrades. Xiaomi holds an 18.1% market share in the RMB3,000-4,000 price range of mobile phone and a 22.6% share in the RMB4,000-5,000 price range, making these customer segments likely to fully utilize the RMB500 subsidy; thus, Xiaomi is expected to be highly sensitive to this policy. Looking forward, the impact from Trump 2.0 is inevitable. China is going to introduce more policy to boost domestic consumption. The fundamental of Xiaomi is positive. The investment value of the stock remains.
S&P 500 closes higher on Trump-fueled optimism
The S&P 500 ended higher on Tuesday as expectations that Trump's policies would accelerate economic growth spurred bullish bets on stocks. Trump said he was considering imposing 25% tariffs on Canada and Mexico starting on February 1, citing concerns about their border policies. The Dow Jones Industrial Average rose 537.98 points, or 1.24%, to close at 44,025.81. The S&P 500 rose 0.88% to close at 6,049.24 points, while the Nasdaq Composite gained 0.64% to close at 19,756.78 points. At the same time, the U.S. Securities and Exchange Commission (SEC)’s push to "developing a comprehensive and clear regulatory framework for crypto assets," has further increased market expectations that the Trump administration may reduce cryptocurrency regulation.
Hong Kong Stock Connect had a net inflow of HK$1.53bn on Tuesday of which SMIC (981) had the largest net inflow, reaching HK$0.86bn; followed by ZTE (763). Xiaomi (1810) recorded the largest net outflow at $0.29bn, followed by Meituan (3690).
Wen Kit Kenny is a SFC licensed person accredited to KGI Group to carry on regulated activities (for details, please refer to:https://apps.sfc.hk/publicregWeb/indi/AJF244/details). He and/or his associate do not have any financial interest in the recommended issuer or new listing applicant.
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