On August 6, Hong Kong's three major stock indices traded in negative territory, with the Hang Seng Index opening with a gap down and falling below the 25,500-point level. The Hang Seng Tech Index declined by more than 2%, as the streak of gains for leading internet stocks came to a halt. As of press time, Alibaba-W (09988.HK) and Xiaomi-W (01810.HK) fell over 3%, while Tencent (00700.HK) and Kuaishou-W (01024.HK) dropped more than 2%. Meituan-W (03690.HK) and Bilibili-W declined over 1%. The Hong Kong Internet ETF Huabao (513770), which focuses on leading internet stocks, saw its on-screen price fall 2.3%.
With hard-tech sectors staging a rebound this week, the question arises: How will this impact Hong Kong-listed internet leaders, and can the rally that began in July be sustained? According to Soochow Securities, the AI hardware market has shown initial signs of a rebound. While a massive capital shift back to tech hardware may not be immediate, it could divert some attention away from Hong Kong stocks. If the performance of US-listed AI midstream and downstream companies is strong, creating a broader rally, it could actually benefit the Hang Seng Tech Index's recovery. Hong Kong's strengths in AI applications, internet platforms, and domestic computing power chains, supported by favorable valuations and policy, could attract some capital inflows.
Shenwan Hongyuan Securities believes that the Hong Kong market is currently in a "triple-bottom" zone, supported by three factors: declining institutional allocations, a stabilization of fundamental expectations, and a significant correction in tech growth valuations. This provides a foundation for a market bottom and recovery. Under a neutral scenario, the Hang Seng Index has a potential upside of 15.40% within the year. If fundamentals or global industry preferences reverse, the massive short positions could be covered, providing high elasticity for market upside.
In recent peripheral markets, shares of software and large model companies have continued to rebound. North American cloud providers reported strong quarterly earnings, with further monetization of their AI businesses. Data from OpenRouter shows that Chinese domestic large models have consistently ranked in the top five in terms of call volume for 14 consecutive weeks. As the capabilities of domestic large models approach the global first tier, Chinese AI applications and agents are entering a phase of widespread growth, marking a turning point for the monetization value of China's large models.
Notably, as of the end of July, the price-to-earnings ratio (PE TTM) of the Hong Kong Stock Connect Internet Index stood at 20.47 times, still within a historically low range at the 8.94% percentile over the past five years. This positions it as a "valuation trough" compared to US, South Korean, and A-share tech stocks. The focus is on the revaluation of Hong Kong internet leaders amid the AI transformation.
The Hong Kong Internet ETF Huabao (513770) and its feeder funds (Class A: 017125; Class C: 017126) passively track the CSI Hong Kong Stock Connect Internet Index. The top ten holdings feature major tech giants like Alibaba-W and Tencent, along with AI application companies across various sectors, offering significant advantages. The ETF supports same-day T+0 trading with good liquidity. For investors looking to gain exposure to Hong Kong tech while reducing volatility, the Hong Kong Large Cap 30 ETF Huabao (520560), the first of its kind in the market, features a "tech + dividend" barbell strategy. Its holdings include high-growth tech stocks like Alibaba alongside stable, high-dividend sectors such as banking and insurance, making it a suitable long-term core holding for Hong Kong allocations.
Reminder: Recent market volatility may be significant, and short-term gains or losses do not predict future performance. Investors should make rational investment decisions based on their own capital and risk tolerance, paying close attention to position sizing and risk management. Data sources include the Shanghai and Shenzhen stock exchanges. For ETF fee details, agencies may charge commissions of up to 0.5% for subscription and redemption, including fees from stock exchanges and registrars. For the Huabao CSI HK Stock Connect Internet ETF Feeder Fund (Class A), the front-end subscription fee is 1,000 yuan per order for amounts over 2 million yuan, 0.6% for amounts between 1 million and 2 million yuan, and 1% for amounts under 1 million yuan. The redemption fee is 1.5% for holding periods of less than 7 days and 0% for holding periods of 7 days or more. No sales service fee is charged. For Class C, no subscription fee is charged, the redemption fee is 1.5% for holding periods of less than 7 days and 0% for holding periods of 7 days or more, and the sales service fee is 0.3%. Risk Warning: The Huabao Hong Kong Internet ETF and its feeder funds passively track the CSI Hong Kong Stock Connect Internet Index, which was established on December 30, 2016, and launched on January 11, 2021. The index's annual returns for the past five full years were: 2025: 27.02%; 2024: 23.04%; 2023: -24.74%; 2022: -23.01%; 2021: -36.61%. The volatility for the same periods was: 2025: 33.60%; 2024: 43.49%; 2023: 32.09%; 2022: 49.01%; 2021: 38.72%. The index's constituent stocks are adjusted according to its methodology, and historical back-tested performance does not guarantee future results. The stocks mentioned in this article are for display purposes only and do not constitute investment advice or represent the holdings or trading activities of any fund managed by the fund manager. The fund manager has assessed the risk level of this fund as R4 (medium-high risk), suitable for aggressive (C4) and above investors. Any information in this article (including but not limited to stocks, commentary, forecasts, charts, indicators, theories, or any form of expression) is for reference only. Investors are responsible for their own investment decisions. Any views, analyses, or forecasts in this article do not constitute investment advice to readers, and the author assumes no liability 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 the performance of this fund. Past performance is not indicative of future results. Fund investment involves risk, and investors should invest cautiously. MACD golden cross signal formed, these stocks are performing well!
Comments