In early trading on June 1, leading Hong Kong-listed internet stocks collectively strengthened. The in-market price of the Huabao Hong Kong Internet ETF (513770) rose 2.15%. Meituan-W, Tencent Holdings, and Xiaomi Group-W all gained over 2%, while Alibaba-W increased more than 1%. The AI application segment showed particularly strong performance, with Meitu surging over 15%. A UBS report indicated that the total overseas revenue of Meitu's applications grew 42% year-over-year in April, with several products demonstrating robust growth abroad. Notably, Wink's overseas revenue in April nearly doubled.
The Hong Kong internet sector has recently accelerated its bottoming process. Current valuations are seen to have already fully priced in pessimistic expectations. Data shows that as of the end of May, the CSI Hong Kong Stock Connect Internet Index has declined over 40% since its correction began on October 3, 2025. The index's latest trailing P/E ratio sits at a historical low, in only the 2.14th percentile over the past decade, indicating a high margin of safety and attractive valuation.
Simultaneously, since 2026, major internet companies have accelerated the iteration of their AI applications and commercialization efforts. Alibaba announced in its latest earnings report that its AI business has formally entered a "commercial return cycle." Alibaba Cloud's external commercial revenue surged 40% in the first quarter, the fastest growth in nine quarters, with AI-related revenue accounting for 30% of that total, marking the eleventh consecutive quarter of triple-digit growth in that segment.
China Merchants Securities pointed out that the AI industry trend is clear. Hong Kong-listed internet platforms possess advantages in user access, data accumulation, cloud services, payment ecosystems, and enterprise customer bases. If AI can subsequently generate clearer revenue contributions in scenarios such as advertising, e-commerce, gaming, office applications, cloud services, and enterprise services, the Hong Kong AI investment theme is expected to gradually shift from infrastructure mapping to the realization of profits at the application level.
Soochow Securities stated that the current Hong Kong market is in a window period characterized by "risk appetite recovery + fundamental expectation improvement." The AI technology rally is expected to rotate from upstream hardware to midstream and downstream applications. The Hong Kong market has strong representation in internet platforms, AI applications, and ecosystem scenarios. Market consensus expectations have recently shown signs of recovery, with EPS expectations for Hong Kong indices beginning to be revised upward. If subsequent profit recovery can be gradually realized, it will help support further valuation repair for Hong Kong stocks and boost market confidence in medium- to long-term capital inflows.
Attention is on the value re-rating of Hong Kong internet leaders under the AI transformation. The Huabao Hong Kong Internet ETF (513770) and its feeder funds track the CSI Hong Kong Stock Connect Internet Index. Its top ten holdings aggregate tech giants like Alibaba-W and Tencent Holdings alongside AI application companies across various sectors, showcasing significant leading advantages. The ETF offers intraday T+0 trading with good liquidity.
For those bullish on Hong Kong tech but seeking to reduce volatility, consider the first-of-its-kind Huabao Hong Kong Large-Cap 30 ETF (520560). It employs a "Tech + Dividend" barbell strategy, holding both high-volatility tech stocks like Alibaba and stable, high-dividend stocks from sectors like banking and insurance, making it an ideal core holding for long-term Hong Kong market allocation.
A reminder: Recent market volatility may be significant. 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.
ETF Fee Note: When subscribing for or redeeming fund shares, subscription/redemption agents may charge a commission not exceeding 0.5%, which includes related fees charged by stock exchanges and registration institutions. Feeder Fund Fee Note: For the Huabao CSI Hong Kong Stock Connect Internet ETF Feeder Fund (Class A), the front-end subscription fee is a flat 1,000 RMB per transaction for amounts over 2 million RMB, 0.6% for amounts between 1 million RMB (inclusive) and 2 million RMB, and 1% for amounts below 1 million RMB. The redemption fee is 1.5% for holdings under 7 days and 0% for holdings of 7 days or more. No sales service fee is charged. The Huabao CSI Hong Kong Stock Connect Internet ETF Feeder Fund (Class C) charges no subscription fee. The redemption fee is 1.5% for holdings under 7 days and 0% for holdings of 7 days or more. The sales service fee is 0.3%.
Risk Disclosure: The Huabao Hong Kong Internet ETF passively tracks the CSI Hong Kong Stock Connect Internet Index. The index base date is December 30, 2016, and it was published on January 11, 2021. The index constituents are adjusted according to its compilation rules. The constituent stocks mentioned are for illustrative purposes only; descriptions of individual stocks do not constitute investment advice in 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 solely 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 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 fund performance does not indicate future results. Fund investment involves risk; caution is advised when investing in funds.
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