The Hong Kong IPO market has demonstrated strong momentum this year. According to Deloitte statistics, the Hong Kong market welcomed 40 new listings in the first quarter of 2026, raising a total of HKD 109.926 billion. This fundraising amount significantly surpassed those of Nasdaq (approximately HKD 44.02 billion) and the NYSE (approximately HKD 40.22 billion), securing the top position globally. Both the number of listings and the total funds raised reached their highest levels for the same period in the past five years. Industry distribution shows a distinct characteristic, with listings heavily concentrated in hard technology sectors. KPMG data indicates that companies listed under the A+H share structure and those classified as Specialist Technology Enterprises contributed nearly 80% of the total funds raised, highlighting the growing prominence of new economy sectors in Hong Kong. Against this backdrop, the FG HK Connect Growth Select Hybrid Fund (Class A: 026923; Class C: 026924), which will conclude its subscription period on April 28, aims to help investors capture the growth potential of China's new economy by focusing on high-growth targets within the Hong Kong market.
The proposed fund manager for the FG HK Connect Growth Select Hybrid Fund is Peng Chenchen, Deputy Director of the Overseas Equity Investment Department at FG Fund. With 11 years of experience in the securities industry and over four years as an investment manager, she has specialized in cross-border investment from the outset of her career. Years of in-depth research and broad market coverage have equipped her to identify high-quality growth companies from a global industry chain perspective, integrating a GARP strategy into her investment framework. She seeks to acquire high growth potential at reasonable prices, emphasizing value and safety margins. Her stock selection criteria can be summarized across four dimensions: first, high-quality growth stocks supported by solid performance; second, companies with stable operations, strong cash flows, and consistent dividend payments; third, stocks with reasonable valuations; and fourth, companies with management teams that have a strong track record and no corporate governance deficiencies.
Adhering to this selection logic, the stocks in Peng Chenchen's portfolios are generally of high quality. For example, in the FG Global Consumer Select Fund, which she has managed the longest, the majority of holdings demonstrate a Return on Equity above 10% and a trailing Price-to-Earnings ratio below 30, indicating significant growth potential and investment value. In terms of cross-border asset allocation, Peng adjusts regional weightings based on the performance of markets like A-shares, Hong Kong stocks, and US stocks. For instance, following a considerable rebound in the Hong Kong market during the first quarter of 2025, the FG Global Consumer Select Fund increased its allocation to Hong Kong stocks, raising the proportion from 35% as reported in the 2024 annual report to 53% in the 2025 first-quarter report. Furthermore, an analysis of her management style in broad-based products reveals a focus on balanced diversification. According to the 2025 fund annual report, the FG Shanghai-Hong Kong-Shenzhen Value Select Fund covered 23 primary Shenwan industries, with broad exposure to sectors such as consumer goods, healthcare, internet, cyclical industries, and finance, with no single sector accounting for an excessively large share.
This mature and effective investment framework is clearly reflected in the fund's net asset value performance. Data from the 2026 first-quarter report shows that as of March 31, the FG Global Consumer Select Fund achieved NAV growth rates of 18.21% over the past year, 81.00% over the past three years, and 59.26% since inception. In contrast, the returns of its performance benchmark over the same periods were -12.41%, -7.95%, and -20.64% respectively, demonstrating significant outperformance.
Since the beginning of 2026, Hong Kong stock valuations have seen a notable decline alongside significant market divergence. The Hang Seng Index's valuation has retreated to approximately 12.86 times earnings, presenting relatively attractive value compared to major global markets. This valuation pullback exhibits clear structural characteristics, with sectors like consumer discretionary, technology, and utilities trading at or near historical lows. Another key advantage of the Hong Kong market is the presence of unique investment targets. For example, the technology and internet sector hosts a large concentration of companies focused on AI applications, including major tech giants not available in the A-share market. The new consumer sector encompasses numerous emerging brands and diverse retail formats, while the biotech and pharmaceutical sector features a higher concentration of innovative drug developers. This scarcity, combined with valuation advantages, forms a solid foundation for the long-term investment appeal of Hong Kong stocks.
Looking ahead, the current environment may present a strategic entry point for Hong Kong market allocation. China Galaxy Securities points out that expectations for a further escalation of US-Iran tensions have diminished, suggesting the worst phase may be over. Should US-Iran negotiations progress smoothly, there remains potential for a rebound in the Hong Kong tech sector. Furthermore, early signs of an inflection point in both the micro-liquidity dynamics and fundamental expectations for the Hong Kong market are emerging. On one hand, the role of recent IPOs in upgrading the market's industrial structure is attracting attention from foreign capital, with overseas active and passive funds beginning to flow back consistently. On the other hand, the US Dollar Index has recently shown signs of peaking and declining. Historical patterns suggest that Hong Kong stocks tend to perform better under conditions of a weaker US dollar.
As the Hong Kong market enters a potential recovery phase, the launch of the FG HK Connect Growth Select Hybrid Fund (Class A: 026923; Class C: 026924) is well-timed. The fund aims to seize opportunities presented by high-quality growth companies during this market recovery, striving to deliver sustainable long-term returns for investors.
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