Hong Kong stocks shine with capital return policies for 2025 gains: Schroders

Hong Kong stocks, despite being world-class operators, remain undervalued, Schroders said.

Unloved Hong Kong stocks and select technology sectors in Mainland China are emerging as promising opportunities in Asian equities for 2025, Schroders said.

In a report, the firm noted some Hong Kong stocks, despite being world-class operators, remain undervalued.

Positive capital return policies being adopted by these companies are expected to drive improvements in their depressed valuations, it said.

In Mainland China, technology stocks in specific sectors are showing strong potential due to market share consolidation. Gaming stands out for its robust consumer engagement, whilst music content benefits from rising monetisation opportunities.

Schroders said the focus remains on disciplined, bottom-up stock selection to navigate market challenges. Identifying quality companies with strong fundamentals and long-term growth potential will be key to achieving consistent and sustainable returns in the coming year.