On March 13, mainland capital recorded a net purchase of HK$18.45 billion in the Hong Kong stock market. The Shanghai-Hong Kong Stock Connect contributed a net buy of HK$11.81 billion, while the Shenzhen-Hong Kong Stock Connect added a net purchase of HK$6.64 billion. The top recipients of mainland inflows were the Tracker Fund (02800), the Hang Seng China Enterprises Index Fund (02828), and Tencent (00700). The most heavily sold stocks included Hua Hong Semiconductor (01347), SMIC (00981), and XFH Group (02473).
Mainland investors continued to aggressively accumulate Hong Kong-listed ETFs. The Tracker Fund (02800), Hang Seng China Enterprises Index Fund (02828), and CSOP Hang Seng Tech Index ETF (03033) received net inflows of HK$7.98 billion, HK$2.83 billion, and HK$976 million, respectively. Analysts at Minyin International noted that the foundation for a bull market in Hong Kong stocks remains intact, citing relative undervaluation. Key factors include the gap from historical bull market averages, lower valuations compared to major global markets, the premium of A-shares over H-shares, attractive dividend yields, and the gradual recovery of southbound capital inflows. Certain sectors also remain undervalued.
Tencent (00700) attracted a net purchase of HK$1.06 billion. The reduction in App Store commissions is viewed as a positive development for the broader entertainment sector. For Tencent, market expectations project smartphone game revenue to grow 11.7% year-on-year to RMB 256 billion in the current year, accounting for 31% of total revenue. Approximately 70% of this is estimated to come from the domestic market, amounting to about RMB 180 billion. Assuming 30% of revenue originates from iOS and the commission rate drops from 30% to 25%, the positive impact on earnings by 2026 is anticipated to be in the low single digits.
CNOOC (00883) saw a net inflow of HK$760 million. Goldman Sachs forecasts that the average Brent crude price will exceed $100 per barrel in March, reaching $85 in April. This projection considers escalating US-Iran tensions, which have damaged energy infrastructure in the Middle East and disrupted shipping through the Strait of Hormuz. The bank further indicated that prolonged disruptions to energy transportation could drive oil prices to even higher peaks.
Yao Cai Securities Financial (01428) received a net purchase of HK$357 million. In November of the previous year, the company announced an amended agreement with Ant Group, extending the acquisition offer deadline by four months to March 25, 2026. The highly watched acquisition has made substantial progress in regulatory approvals. The Hong Kong Securities and Futures Commission completed its review on September 23, and the filing process with the National Development and Reform Commission is proceeding as scheduled. As of the announcement date, Ant Group had paid HK$164 million.
BABA-W (09988) attracted a net buy of HK$294 million. Alibaba Cloud's mobile version of OpenClaw, codenamed "Lobster" and officially named JVS Claw, has been launched and is also accessible via the Alibaba Cloud website. JVS Claw is a product integrating the AI assistant Clawbot and the cloud-independent environment ClawSpace, with its core objective focused on "execution."
Mainland investors divested from semiconductor stocks. Hua Hong Semiconductor (01347) and SMIC (00981) experienced net outflows of HK$242 million and HK$70.77 million, respectively. Morgan Stanley previously highlighted that AI demand is driving a significant divergence within the semiconductor sector. Upstream manufacturers, such as those producing AI memory chips like HBM, are benefiting substantially. However, downstream players like PC and smartphone manufacturers may face challenges in passing on cost pressures.
Additionally, Changfei Optical Fiber & Cable (06869) and Shandong Molong Petroleum Machinery (00568) received net purchases of HK$100 million and HK$34.4 million, respectively, while XFH Group (02473) saw a net outflow of HK$18.9 million.
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