Hong Kong's low-priced technology and internet leaders are continuing their recovery trend. On the morning of July 8th, major Hong Kong stock indices opened higher. Alibaba Group Holding Ltd (HKG: 9988), Xiaomi Corporation (HKG: 1810), and Kuaishou-W (HKG: 1024) rose over 2%. Tencent Holdings Ltd (HKG: 0700) gained over 1%, marking its seventh consecutive day of gains. Bilibili Inc (HKG: 9626) and Meituan-W (HKG: 3690) also advanced. The market price of the Hong Kong Internet ETF Huabao (513770), which heavily invests in internet leaders, rose as much as 2.33% at one point, aiming for its fifth straight positive session.
Market Rotation Dynamics
Recent market activity in Hong Kong has shown a clear "high-to-low" rotation characteristic, with capital shifting from the previously high-flying AI hardware sector to lower-priced technology and internet stocks. Analysis suggests this reflects that AI trading has become increasingly crowded, making capital more sensitive to negative news, and thus flowing towards traditional internet leaders in undervalued sectors. The convergence of three factors—valuation bottom, improving liquidity, and a shift in the AI narrative—may create a window for a phased valuation recovery in Hong Kong's tech and internet sector.
Catalysts from Company Developments
On the news front, Hong Kong's internet giants have been frequently announcing AI progress. Kuaishou's Kling AI completed an external funding round with a total cap of $3 billion, achieving a post-investment valuation of $18 billion, setting a new global record for video large model company financing. Meituan released LongCat-2.0, the industry's first trillion-parameter large model fully trained and inferred using domestic computing power. Tencent officially launched its next-generation large model Hunyuan Hy3, achieving comprehensive leaps in intelligence level, stability, and cost-effectiveness.
Analyst Perspective on Value
According to Guojin Securities, the current global AI industry trend is shifting towards the application end and platform sides with significant entry-point value. Internet platforms possess billions of user entry points, massive multimodal data assets, and complete ecosystem industry chains like cloud and payments, making them core scenarios for AI commercialization. Market expectations are that major internet companies will successively push for AI commercialization. The path to monetization leveraging their platform scenarios is promising, and the sector's valuation logic may undergo a re-evaluation based on its role as an AI application entry point.
Investment Vehicles for Exposure
Focus is on the value re-rating of Hong Kong internet leaders amid the AI transformation. The Hong Kong Internet ETF Huabao (513770) and its feeder funds passively track the CSI Hong Kong Stock Connect Internet Index. Its top ten holdings aggregate tech giants like Alibaba Group Holding Ltd and Tencent Holdings Ltd as well as AI application companies across various sectors, offering significant leader advantages. It offers intraday T+0 trading with good liquidity.
Alternative Strategy for Stability
For those bullish on Hong Kong tech but seeking to reduce volatility, consider the market's first Hong Kong Large-Cap 30 ETF Huabao (520560). It employs a "tech + dividends" barbell strategy, holding both high-beta tech stocks like Alibaba Group Holding Ltd and stable high-dividend stocks from sectors like banking and insurance, making it an ideal long-term core holding for Hong Kong market allocation.
Risk and Fee Disclosures
A reminder: Recent market volatility may be significant, and short-term gains or losses do not predict future performance. Investors must make rational investment decisions based on their own financial situation and risk tolerance, paying high attention to position sizing and risk management. The Hong Kong Internet ETF Huabao and its feeder funds passively track 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 per its compilation rules. Constituent stocks mentioned are for illustrative purposes only; descriptions of individual stocks are not investment advice of any form nor represent the holdings or trading动向 of any fund managed by the manager. The fund manager assesses this fund's risk等级 as R4 - Medium to High Risk, suitable for Aggressive (C4) and above investors. Any information appearing herein is for reference only. Investors are responsible for any independent investment decisions. Furthermore, any views, analysis, or forecasts herein do not constitute investment advice of any kind to readers, and no responsibility 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 fund performance does not indicate future results. Fund investment carries risks; caution is required when investing in funds.
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