According to a report by Hang Seng Indexes Company, the technology and biotechnology themes emerged as standout performers in the Hong Kong stock market during 2025. Both the Hang Seng Tech Index and the Hang Seng Biotech Index achieved their best annual performances since their respective launches. Against this backdrop, the Hang Seng Dual Tech Index was introduced in January 2026, designed to capture these two prominent themes within a single index by combining the constituent stocks of the Hang Seng Tech Index and the Hang Seng Biotech Index.
The Hang Seng Tech Index and the Hang Seng Biotech Index both set new annual gain records in 2025. The technology and biotech sectors attracted significant market attention throughout the year, a fact fully evidenced by the exceptional performance of their benchmark indices. As shown in Figure 1, the Hang Seng Tech Index surged by 23.5% in 2025, marking its largest annual gain since its launch in July 2020. Concurrently, the Hang Seng Biotech Index recorded a substantial 64.5% increase, its strongest annual performance since its inception in December 2019. The robust performance of these two indices was primarily driven by structural factors and improving fundamentals, which will be explored in further detail in subsequent sections.
China's technology sector remains a focal point for the market, bolstered by clear and sustained policy backing. Within China's 15th Five-Year Plan (2026-2030), the objective of "significantly elevating the level of self-reliance and strength in science and technology" is listed as a primary goal. Furthermore, artificial intelligence has become a major area of market focus, with Chinese AI models gaining increasing global recognition. According to data from Artificial Analysis, large language models developed by Zhipu, DeepSeek, and Alibaba have now ascended to rank among the global leaders. This policy support, coupled with the rapid advancement of AI, is further accelerating the structural growth trajectory of China's tech industry. The Hang Seng Tech Index, one of our flagship indices, is widely recognized as a benchmark for the Chinese tech sector. It represents the 30 largest technology companies listed in Hong Kong, whose businesses are highly focused on areas such as smart industries, cloud computing, digital services, e-commerce, fintech, or networking. The Hang Seng Tech Index has since developed a diversified product ecosystem, encompassing exchange-traded products, index funds, and derivatives including futures, options, warrants, and bull/bear certificates. By the end of 2025, the total assets under management for ETPs tracking the Hang Seng Tech Index had surpassed $44 billion.
The Chinese biotechnology sector gradually became a market focus starting from the first half of 2025, propelled by the growing global recognition of innovative drugs developed in China. Market sentiment was further reinforced by a notable increase in out-licensing deals for novel drugs in recent years. According to the NextPharma database from pharmaceutical data provider PharmaGO, the total value of out-licensing transactions for Chinese innovative drugs reached a record high of $136 billion in 2025 (Figure 2), significantly exceeding the previous record of $52 billion set in 2024. This record-breaking transaction volume highlights a substantial enhancement in the global recognition, technological capability, and competitiveness of China's biotech industry. It marks a pivotal transition for the sector, evolving from relying on licensing-in foreign technologies to actively out-licensing domestically developed innovative products to the international market. Benefiting from these favorable industry trends, the Hang Seng Biotech Index achieved a record 64% annual gain last year. This positive momentum carried into 2026, with the index rising 9% in January. As a key benchmark for the biotech sector, the Hang Seng Biotech Index tracks the performance of the 30 largest eligible biotech companies listed in Hong Kong, encompassing leading and representative biotech firms and innovative drug developers. Moreover, the index's benchmark status has been further solidified by its expanding product ecosystem. In November 2025, Hong Kong Exchanges and Clearing Limited launched futures products based on the Hang Seng Biotech Index, complementing the existing ecosystem of ETPs and index funds. By the end of 2025, the total AUM for ETPs tracking the Hang Seng Biotech Index was close to $1.5 billion.
Technology and biotechnology represent two distinct yet complementary pillars of innovation within China's landscape. While their development cycles differ, both sectors share characteristics of high research and development investment, strong policy support, and structural growth potential. The newly launched Hang Seng Dual Tech Index integrates these two themes into a single benchmark. The index allocates 75% of its weight to the Hang Seng Tech Index and 25% to the Hang Seng Biotech Index (adjusted at each index rebalancing date), reflecting their respective market capitalizations while maintaining representation of both themes. The Hang Seng Dual Tech Index leverages these two underlying indices and their diverse product ecosystems, benefiting from their transparent, rules-based methodology and rigorous index management. Launched on January 9, 2026, with performance data back-tested to the end of 2020, the index recorded a 36% gain in 2025. This upward trend continued into 2026 (Figure 3), with a 5% increase in January, reflecting sustained market interest in Chinese innovation themes. Furthermore, the combination of tech and biotech offers more than just thematic diversification. As of January 30, 2026, the Hang Seng Dual Tech Index exhibited a one-year annualized volatility of 34% (Figure 4), lower than the 35% of the Hang Seng Tech Index and the 40% of the Hang Seng Biotech Index. Consequently, this index allows investors to capture opportunities across both themes while maintaining comparatively lower volatility. As of January 30, 2026, the Hang Seng Dual Tech Index comprised 58 constituent stocks, with the exact number subject to change based on the overlap between the Hang Seng Tech and Hang Seng Biotech indices. The top 20 constituents collectively accounted for 74% of the index's total weight (Figure 5). In terms of sector distribution, the structure of the Hang Seng Dual Tech Index is broadly similar to the Hang Seng Tech Index but features a significantly higher weighting in healthcare, which reaches 27% (Figure 6).
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