Citi: Hong Kong stock valuation passbook allows the Hang Seng Index target price to drop sharply to 22,000 points by the end of this year

On January 16, Citi released a report that the Hang Seng Index's forecast for earnings growth per share this year has been reduced to 5.1%, compared with 9.4% in January last year and 6.8% in August last year. MSCI China's earnings growth forecast also fell to 9%, down from 14.2% a year ago. The current valuation of Hong Kong stocks gives the Hang Seng Index a price-to-earnings ratio of 8.8 times the forecast price-to-earnings ratio for the coming year, or 1 times the price-to-book ratio, which is 1 to 2 standard deviations below the historical average. The CSI 300 index and the MSCI China index are one standard deviation lower. The bank lowered the target price of the Hang Seng Index to 21,000 points (originally expected to be 26,000 points) at the end of June this year and 22,000 points (originally expected to be 28,000 points) at the end of this year to reflect the slowdown in earnings per share growth.