Strong Liquidity and Impressive Earnings Fuel Hong Kong Stock Market Rebound

On March 6, Hong Kong stocks experienced a robust rebound, with the Hang Seng Tech Index surging 3.15% at the close. Leading internet companies led the rally, with BABA-W, XIAOMI-W, TENCENT, MEITUAN-W, and KUAISHOU-W all rising more than 3%. The Hong Kong Internet ETF (513770), representing core AI assets in Hong Kong, ended its consecutive decline, with its price soaring 2.49% and reclaiming the 5-day moving average.

Several previously suppressing factors for the Hang Seng Tech sector showed signs of easing. Regarding overseas liquidity, the Federal Reserve's total assets expanded to $6.6289 trillion, increasing by $15 billion from the previous day. Overnight reverse repo operations also grew by nearly $2 billion. The US leveraged loan index rebounded for the second consecutive day.

Simultaneously, strong earnings from internet companies significantly alleviated market concerns over substantial AI investments. Bilibili Inc. achieved its first annual profit with an adjusted net income of RMB 2.588 billion for 2025, with AI-related content becoming one of its fastest-growing categories. JD HEALTH reported a 36% surge in net profit for 2025, marking a historic high, with AI-enhanced medical services showing significant results.

Prior to this rebound, Hong Kong stocks, particularly the Hang Seng Tech Index, had reached a "peak fear" moment. Focusing on the weighted internet sector, the Hang Seng Stock Connect Internet Index had declined nearly 30% since October 2025 as of March 5, with valuations falling to the lower 5.38 percentile range over the past five years, suggesting risk-off pricing may be nearing saturation.

2026 is a pivotal year for AI's transition from "concept speculation" to "earnings realization." As major participants and beneficiaries of the AI wave, large internet firms are expected to shift their value anchors toward becoming AI infrastructure and service providers, thereby adding elasticity to their valuations as tech assets.

To capitalize on 2026 as the inaugural year of AI commercialization, attention should be paid to core AI tools in Hong Kong stocks. The Hong Kong Internet ETF (513770) and its feeder funds track the CSI Hong Kong Stock Connect Internet Index, which includes top holdings such as BABA-W, TENCENT, XIAOMI-W, KUAISHOU-W, and BILIBILI-W, featuring significant leading advantages and offering T+0 trading with good liquidity.

For investors bullish on Hong Kong tech but seeking reduced volatility, the Hong Kong Large-Cap 30 ETF (520560) employs a "tech + dividends" barbell strategy. Its portfolio includes high-growth tech stocks like Alibaba and TENCENT, alongside stable high-dividend stocks, making it an ideal long-term holding tool for Hong Kong market exposure.

Investors are reminded that recent market volatility may be high, and short-term gains or losses do not indicate future performance. It is essential to invest rationally based on individual financial circumstances and risk tolerance, with careful attention to position sizing and risk management.

Data shows the CSI Hong Kong Stock Connect Internet Index recorded the following annual performances over the past five full years: 2021: -36.61%; 2022: -23.01%; 2023: -24.74%; 2024: 23.04%; 2025: 27.02%. Index constituents are adjusted according to its rules, and past performance does not guarantee future results.

ETF fee note: Subscription or redemption agents may charge up to 0.5% in commissions, including fees from exchanges and registration institutions. Feeder fund fees: The Class A feeder fund charges a front-end subscription fee of 1% for amounts under RMB 1 million, 0.6% for RMB 1-2 million, and a flat RMB 1,000 for over RMB 2 million. Redemption fees are 1.5% for holdings under 7 days and 0% thereafter, with no sales service fee. The Class C feeder fund has no subscription fee, a 1.5% redemption fee for holdings under 7 days (0% thereafter), and a 0.3% sales service fee.

Risk disclosure: The Hong Kong Internet ETF passively tracks the CSI Hong Kong Stock Connect Internet Index, which has a base date of December 30, 2016, and was launched on January 11, 2021. Constituents are adjusted per index rules. Mentioned stocks are for illustration only and do not constitute investment advice or reflect fund holdings. The fund manager rates this fund as R4 (medium-high risk), suitable for aggressive (C4) or higher investors. All information provided is for reference only, and investors are responsible for their decisions. No liability is accepted for losses arising from the use of this content. Past fund performance does not guarantee future results, and investing carries risks.