Huaxia Fund expressed optimism for A-shares and Hong Kong stocks next year, stating that the market has limited downside potential and overall trend is upward. The pace of market rebound is influenced by various factors such as China's policy rollout, changes in international environment, and economic data recovery pace. Overall, it is believed that A-shares will outperform Hong Kong stocks. Huaxia Fund pointed out that the size of funds held by national stabilizing market funds, such as Central Huajin, has reached nearly 4 trillion yuan, showing characteristics of entering at low levels. With the tools introduced by financial regulatory agencies to stabilize the capital market, there will be sufficient fund support when the market experiences short-term downward trends, which is why A-shares are expected to perform better than Hong Kong stocks. Currently, the valuations of A-shares and Hong Kong stocks are still relatively low compared to major global stock markets. Given the premise of economic improvement, low valuations can be a reason for investment. Although the average valuation of the Chinese stock market is at historical averages over the past decade, the risk-free interest rate in China has decreased significantly, and the valuation, dividend yield, and risk-free rate of return of the stock market are still historically low. These factors suggest that the overall valuation of the Chinese stock market is low, and with economic improvement, valuations may become more attractive for investment. In terms of allocation strategy, Huaxia Fund believes that in a period of marginal economic improvement and relatively abundant liquidity, growth stocks are expected to outperform value stocks overall. However, external uncertainties remain high, and despite gradual policy implementations, it will take some time for policies affecting consumption and real estate to take effect. Therefore, the market may continue to cycle in styles and industries, and growth stocks, thematic stocks, and high dividend value stocks are expected to perform well. In terms of specific sectors, focus is placed on sectors such as semiconductors, consumer electronics, and new energy in the technology sector. There will be opportunities for individual stocks in the biopharmaceutical sector, and the consumer sector is expected to recover in the second half of the year as the economy improves. As for high dividend value sectors, attention is on investment opportunities in companies with improved cash flow after capacity clearance and competition slowdown, and those that prioritize shareholder returns.