On January 8th, Hong Kong stocks continued their decline, with both the Hang Seng Index and the Hang Seng Tech Index falling over 1%. Most leading technology and internet stocks trended downward, with Meituan-W dropping over 3%, Alibaba-W declining over 2%, Tencent Holdings falling more than 1%, and Xiaomi Group-W also dipping; Bilibili-W bucked the trend, rising over 2%. The Hong Kong Internet ETF (513770), representing core Hong Kong-listed AI assets, saw its price close down 0.93%, yet displayed persistent premium trading, indicating strong buying interest. Data from the Shanghai Stock Exchange revealed that the Hong Kong Internet ETF (513770) has seen net capital inflows exceeding 5 billion yuan over the past three consecutive days.
Alibaba-W recently announced that its flash sales platform, Taobao Deals, achieved key progress in the latest quarter. The company stated it will continue to firmly increase investment to achieve an "absolute first" position in the market. Forward-looking data indicates that Taobao Deals' market share growth momentum remained strong in Q4 2025, while its losses narrowed at a faster rate compared to competitors. According to forecasts from the Chinese Academy of International Trade and Economic Cooperation, China's instant retail market scale is projected to surpass 1 trillion yuan by 2026 and reach 2 trillion yuan by 2030.
Regarding AI developments, Alibaba's subsidiary, Amap, announced an upgrade to its "Street-Sweeping List." The new version launched several features including "Seasonal Rankings," "Friend Activity," and "My Lists," and introduced a "Flying Street View" function based on its self-developed world model technology. Industry insiders believe Amap is building an evolving, continuously enriched "full reality" digital asset pool, potentially positioning it as a super hub in the AI era.
As the AI industry enters a profitability realization cycle, internet giants like Alibaba and Tencent Holdings are gaining a new engine for profit growth. According to Bloomberg consensus estimates, the Hang Seng Tech Index's EPS is forecast to grow by a significant 34% in 2026, a surge largely attributed to the fundamental reshaping of core business efficiency by AI technology.
On the capital flow front, southbound capital has continued its substantial purchases of Hong Kong stocks since the start of the year. In the first three trading days of 2026, cumulative net purchases by southbound capital reached HK$307.8 billion, with internet leaders being heavily bought. Xiaomi Group-W saw net purchases of HK$31.48 billion, while Alibaba-W also attracted net buying exceeding HK$20 billion. Goldman Sachs anticipates southbound net purchases will hit a new high of $200 billion in 2026. A key factor is the persistently high AH premium, currently at 37%, highlighting the valuation appeal of Hong Kong stocks.
GF Securities stated that the rise in Hong Kong assets has fundamental support. Due to a lower proportion of traditional economic sectors compared to A-shares, and against a backdrop of stabilizing domestic and external demand alongside supportive macro policies since the second half of 2024, Hong Kong stock profitability has shown signs of structural recovery. With the tapering of subsidies in the food delivery sector and AI-driven advertising and cloud services emerging as new growth drivers, the Hong Kong market may transition from being liquidity-driven to being driven by both profitability and liquidity.
The Hong Kong Internet ETF (513770) and its feeder funds (Class A: 017125; Class C: 017126) passively track the CSI Hong Kong Stock Connect Internet Index. Its constituent stocks aggregate leading companies in AI cloud computing, large models, and AI applications across various sectors, including Alibaba-W, Tencent Holdings, and Xiaomi Group-W. The top ten holdings account for over 78% of the index, demonstrating significant concentration in market leaders.
For investors bullish on Hong Kong tech but seeking to reduce volatility, the market's first Hong Kong Large-Cap 30 ETF (520560) is worth noting. It employs a "Tech + Dividend" barbell strategy, holding both high-beta tech stocks like Alibaba and Tencent Holdings, and stable high-dividend stocks such as China Construction Bank and Ping An of China, making it an ideal core holding for long-term Hong Kong market allocation.
Investors are reminded that recent market volatility may be significant, and short-term price movements are not indicative of future performance. Investors must invest rationally based on their own financial situation and risk tolerance, paying close attention to position sizing and risk management.
Data source: Shanghai and Shenzhen Stock Exchanges, etc. The annual performance of the CSI Hong Kong Stock Connect Internet Index for the past five full years is as follows: 2021: -36.61%; 2022: -23.01%; 2023: -24.74%; 2024: 23.04%; 2025: 27.02%. The index's constituent stocks are adjusted according to its compilation rules; its historical backtested performance does not predict future index performance.
Institutional views source: Goldman Sachs report "2026 China Equity Market Outlook" dated January 7, 2026; GF Securities report "2026 Hong Kong Stock Strategy Outlook: Step by Step, Rising Tide Lifts All Boats" dated January 5, 2026.
Risk Disclosure: The Hong Kong Internet ETF passively tracks the CSI Hong Kong Stock Connect Internet Index. The index's base date is December 30, 2016, and it was published on January 11, 2021. Its constituent stocks are adjusted according to the index compilation rules. The mention of index constituents herein is for illustrative purposes only and does not constitute investment advice in any form, nor does it represent the holdings or trading动向 of any fund managed by the management company. The fund manager assesses this fund's risk level as R4 - Medium-High Risk, suitable for Aggressive (C4) and above investors. Any information appearing in this text (including but not limited to stocks, commentary, forecasts, charts, indicators, theories, any form of expression, etc.) is for reference only. Investors are solely responsible for any independent investment decisions. Furthermore, any views, analysis, or forecasts herein do not constitute investment advice of any kind to the reader, and no liability is accepted for any direct or indirect losses arising from the use of this content. The performance of other funds managed by the fund manager does not guarantee this fund's performance. Past performance of the fund is not indicative of its future results. Fund investment carries risks, and fund investment must be approached with caution.
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