KGI Asia pointed out that the Hang Seng Index is expected to return to the level of 23200 points next year, corresponding to a forecasted price-to-earnings ratio of 10.5 times, slightly higher than the 10-year average of 10.26 times. This is due to the fact that when the Hang Seng Index fell from its peak this year, the market sentiment was unusually exuberant, with daily trading volume once exceeding 600 billion Hong Kong dollars. KGI believes that although US-China relations will be the biggest risk for Hong Kong stocks next year, optimistically, Trump's claim to levy a 60% tariff on Chinese imports may just be a negotiating tactic. The final tariff rate and coverage range remain unknown, and considering that the Chinese Ministry of Finance still has economic stimulus policies that have not yet been implemented, the outlook for the future market is not too pessimistic. It is expected that the Hang Seng Index will return to the level of 23200 points in 2025; if the Hang Seng Index closes at 19700 points at the end of the year, the potential increase will be about 17.8%. In terms of valuation, the market predicts a year-on-year increase of 5.1% in corporate earnings per share next year, so the forecasted price-to-earnings ratio corresponding to 23200 points is 10.50 times, slightly higher than the 10-year average of 10.26 times. KGI explained that the target price of 23200 points is based on: (1) economic stimulus measures meeting expectations, targeting private consumption; (2) Hang Seng earnings per share maintaining growth of over 5%; (3) US-China conflicts limited to the trade level. Zhu Yanmin, chairman of KGI Investment Advisory, said that global economic growth in 2025 is expected to be similar to that in 2024. Despite the downward trend of the US economy, it remains relatively strong among mature markets. The biggest variable in the economic performance in 2025 is still the implementation of policies after Trump took office. It is expected that the Federal Reserve will cut interest rates by 0.75% to 1% in the future, with this round of rate cuts possibly reaching a low point of 3.75 to 4.0% in 2025, and may start raising rates again in 2026. After two consecutive years of being driven by the artificial intelligence trend, US stocks are no longer cheap in terms of valuation, but there are opportunities for sector rotation. It is estimated that the S&P 500 Index will still have a high single-digit earnings growth in 2025, with an annual return estimated to be between 6% and 12%, a decrease from the previous two years. He predicts that US stocks should be able to maintain the post-election gains in the first quarter, with policy risks from Trump and expectations of economic downturn starting to be reflected in the second quarter, leading to market volatility; risks will further increase in the second half of the year, so the performance in the first half of the year is expected to outperform the second half.