Daily Investment Strategy
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Tencent Holdings (0700): The market panicked due to the adjustment of the tax rate on virtual goods in games, but the official statement has clarified that the tax rate for such goods will remain at 6%, and Tencent's gaming business will not be affected. Policy certainty eliminates false risks, allowing its valuation to return to rationality after being mistakenly suppressed. Tencent's flagship titles, *Honor of Kings* and *Peacekeeper Elite*, are leading in the market, demonstrating strong cash flow capabilities. Short-term market reactions often deviate from fundamentals; investors should reassess the long-term growth potential and valuation rationality of Tencent's gaming business.
Global resource competition
US President Trump launched a $12 billion "Project Vault," partnering with private companies to establish national reserves of key minerals such as rare earths, lithium, and cobalt, aiming to reduce dependence on foreign supply chains. Simultaneously, China is quietly accelerating the expansion of its strategic copper reserves through its State Reserves Bureau, a move clearly a defensive measure in response to the escalating global resource competition. This indicates that the US-China rivalry has escalated into a resource control war, and geopolitics is reshaping the pricing logic of commodities. Commodities are shifting from a "just-in-time" approach, prioritizing maximum capital efficiency, to a "just-in-case" approach. Commodities are no longer priced solely by market supply and demand, but instead are imbued with a premium reflecting national strategic security.
Hong Kong Stock Connect recorded a net inflow of HK$950 million on Tuesday, with Tencent Holdings (0700) recording the largest net inflow at HK$1.96 billion, followed by Southern Hang Seng Technology (3033); while Tracker Fund of Hong Kong (2800) recorded the largest net outflow at HK$3.76 billion, followed by SMIC (981).
Leung Kai Tong 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/ADU276/details). He and/or his associate do not have any financial interest in the recommended issuer or new listing applicant.
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