In April, Most US tech companies’ earnings came in line with or miss market expectations, US market fluctuated together with the above-trend inflation, but we still believe in the trend of AI. While in China market we noticed better than expectations earning results in several industry, e.g. export, Internet, and new energy vehicle. Though tech firms’ results were below expectation. April also witnessed a notable rebound in Hong Kong market. We expect the rally will continue as there are several drivers support:

1) China's Q1 GDP growth came in stronger than market consensus and GDP growth forecast for 2024 full-year is over 5%.

2) the CSRC released a set of policies to improve market, e.g. less primary listings, higher dividend payout.

3) 1Q24 earnings of corporations in Internet, high-end manufacturing and consumer industries beat expectations, and linked with improved div payout or share buy back

4) China equity market has been very inexpensive compared with other EM markets, take India as example

5) The meeting statement of the Central Financial and Economic Affairs Commission (CFEAC) demonstrated a more aggressive government actions in real estate destocking, which will reduce the potential financial risk that China might face and improve social confidence.

6) Potential reduction in dividend tax and other policies might support Hongkong market.

We expect a continued rebound of China market with stable fundamentals and capital inflow, and Hongkong market will perform better in short term.