2025 Market Rotation and Position Adjustment Strategy for Investors with Heavy Positions in the Oil and Gas Industry

• The Hang Seng Index rose by approximately 30.6%—33.25% cumulatively in 2025, and the Hang Seng Tech Index increased by about 25.74%—26.2% for the year, outperforming most major global markets significantly (Hong Kong stocks experienced an unexpected structural bull market in 2025) [1]. Liquidity in the Hong Kong stock market has been significantly restored: Southbound funds continued to flow in, with a net inflow of over HKD 1.38 trillion for the year, hitting a historical high; the share of Hong Kong Stock Connect turnover (12-month average) increased from about 47% at the beginning of the year to approximately 61% [1][2]. The above macro and capital environment provided support for the overall performance of the Hong Kong stock market.
• Sector rotation shows phased characteristics (from a summary of the full-year rhythm of the Hong Kong stock market):
  • Phase 1 (Jan—Mar): Driven by tech events such as the DeepSeek large model, the tech and internet sectors led valuation recovery [2].
  • Phase 2 (Apr—Jun): Affected by external tariff shocks and the shift between domestic demand/overseas innovation logic, the new consumption and innovative drug sectors were relatively active [2].
  • Phase 3 (Jul—Sep): Improved liquidity combined with strengthened AI narratives of internet leaders, the tech and internet sectors outperformed again [2].
  • Phase 4 (Oct—Dec): Affected by repeated overseas interest rate cut expectations and concerns about AI bubbles, the internet and innovative drug sectors came under阶段性 pressure, while defensive or low-valued sectors such as finance performed relatively prominently [2].

Note: Currently, we have not obtained brokerage API market and financial data (real-time quotes and financial/technical tools did not return valid data) for CNOOC (00883.HK), Tencent Holdings (00700.HK), and Qingdao Port (601298.SH). Therefore, the following strategy and impact analysis will mainly be based on public market and industry views, without involving quantitative judgments unsupported by data.

• Public reports generally believe that the oil and gas sector in 2025 was supported by multiple themes such as energy security, reform of oil and gas central enterprises, and high dividend yields. Combined with fluctuations caused by crude oil prices and geopolitical risks in some phases, oil and gas companies have dual attributes of “value + cycle” in the structural market [2][3]. However, regarding quantitative data such as “current valuation, oil price trends, and sector capital flows”, this time we did not obtain it from brokerage APIs, so we cannot make quantitative judgments.
• Qualitative outlook from institutional views (not representing quantitative forecasts): Brokerages focus on cost control, capital expenditure rhythm, and dividend policies of oil and gas central enterprises in their medium- and long-term research reports, regarding them as important defensive allocations in the context of energy transition and inflation [2][3].

• Hong Kong-listed internet leaders experienced a process of “valuation recovery—correction—re-differentiation” in 2025: In the early part of the year, driven by AI narratives, valuations rose; from mid to late year, affected by repeated overseas interest rate cut expectations, concerns about AI bubbles, and regulatory expectations, they came under阶段性 pressure and differentiation [2][3].
• Qualitative outlook from institutional views: Multiple institutions are optimistic about the medium- and long-term AI commercialization and advertising/cloud/payment businesses, believing that leaders with globalization and high ROIC characteristics have structural growth space [2][3]. However, regarding key indicators such as “current PE, profit growth rate, and capital position ratio”, this time we did not obtain API data from brokerages, so we cannot make specific valuation and target price judgments.

• The port and export chain fluctuated greatly in 2025 due to external demand and tariff expectation disturbances. Institutional views believe that port enterprises with stable cash flow are typical defensive assets. However, regarding Qingdao Port’s “profitability, valuation level, and dividends”, this time we did not obtain API data support.

Note: Since we did not obtain brokerage API market, technical, and financial data for the three targets this time, the following only provides “directional, scenario-based” qualitative discussions and does not make specific quantitative forecasts on portfolio returns.

• From the perspective of rebalancing the “growth—value” style, when internet leaders are at a阶段性 valuation high or growth uncertainty rises, moderately reducing positions (realizing gains) and increasing allocations to high-dividend, stable cash flow oil and gas helps reduce portfolio volatility and enhance defensive attributes [2][3]. Conversely, if the profit and valuation recovery of the internet sector is realized, moderately retaining some leader exposure can share long-term growth dividends.
• For band operation of CNOOC: If band increases and decreases are carried out in the phase of rising oil prices and strong energy theme cycles, it needs to be combined with judgments on oil prices, capital flows, and dividend expectations. Without specific market and capital data, we cannot evaluate the actual return contribution of band operations.

• Reducing positions at high prices is more of an operation idea of “realizing gains and controlling drawdowns”, and its effect depends on the matching degree between the reduction timing and subsequent trends. Retaining bottom positions and buying back at low prices is more inclined to “long-term holding + cost optimization”. Public reports show that Hong Kong-listed internet leaders experienced multiple ups and downs in 2025, and both strategies may produce differentiated results, but specific quantitative impacts need to be evaluated in combination with individual stock market data [2][3].

• Public views usually regard ports as defensive assets: with stable cash flow, relatively low valuation, and certain dividend attributes, which help reduce the overall volatility of the portfolio and enhance dividend returns. However, this time we did not obtain specific financial and market data for it, so we cannot quantify its marginal contribution to the portfolio’s Sharpe ratio, volatility, or returns.

• Continuously tracking Southbound capital flows, Hong Kong Stock Connect turnover share, and relative sector performance helps identify early signals of style switching. Public data shows that Southbound capital inflows and transaction share have increased significantly, indicating that domestic capital is continuously enhancing its pricing power in the Hong Kong stock market, which has an important impact on the sustainability of sector styles [1][2].

• Pay attention to changes in Sino-US interest rate differentials and liquidity environment (rhythm of interest rate cuts/easing), domestic policy orientations such as “stable growth/anti-involution/AI commercialization”, and “tariff/geopolitical” events’阶段性 disturbances to the export chain and oil and gas sectors [2][3].
• Industry level: Sectors such as AI applications, cloud computing, CXO, precious metals, papermaking, and aviation are mentioned as potential focus directions in some institutional outlooks [3], but specific stock selection needs to be combined with financial reports and valuation data.

• In the absence of brokerage API valuation data, valuation and dividend information provided by public channels (such as exchanges and company announcements, public reports of research institutions) can be referred to, and priority should be given to:
  • Central state-owned enterprises with stable dividends, moderate or high payout ratios, and sufficient cash flow;
  • Segment leaders with long-term competitiveness, stable ROIC, and reasonable valuations.

• Establish a mechanism for batch buying/selling and stop-loss/take-profit to avoid large single-point bets;
• Use sector/style hedging tools (if any) to reduce net value volatility caused by extreme style switching or geopolitical/interest rate unexpected events.

• Oil and gas (such as CNOOC): Public views generally recognize its allocation value in high dividends, cash flow, and defensiveness, but the current valuation and oil price rhythm were not obtained through APIs. It is recommended to track the company’s cost, capital expenditure, and dividend policies in combination with data and research reports from public channels [2][3].
• Internet (such as Tencent Holdings): It has global business layout and AI monetization potential in the medium and long term, but needs to pay attention to regulatory and valuation fluctuation risks. This time, there is no API data to support specific valuation and target prices, so it is recommended to evaluate in combination with public financial reports and analyst tracking [2][3].
• Port (such as Qingdao Port): It has defensive attributes and dividend characteristics, suitable for playing a stabilizer role in the portfolio, but specific financial and valuation data need to refer to company announcements and research reports.

Important Note: Since the acquisition of brokerage API data for Hong Kong/A-share stocks was unsuccessful this time, the above strategies and impact analysis are completely based on public market and industry views, without quantitative simulations or return calculations.

References
[1] Caixin Society - Hong Kong Hang Seng Index surged 33% in 2025, hitting a five-year high, and multiple institutions predict it will break 30,000 points next year (https://www.cls.cn/detail/2236211)
[2] Interface News - Review of Hong Kong Stocks in 2025: “Recovery” and “Differentiation” (https://www.jiemian.com/article/13784719.html)
[3] Sina Finance - CITIC Securities: 2026 Macro Asset Outlook (https://finance.sina.com.cn/jjxw/2025-12-26/doc-inheautp8141502.shtml)