On May 20th in the Hong Kong stock market, northbound capital recorded a net purchase of HK$5.708 billion. Specifically, the Shanghai-Hong Kong Stock Connect saw a net purchase of HK$2.998 billion, while the Shenzhen-Hong Kong Stock Connect recorded a net purchase of HK$2.71 billion.
The stocks receiving the largest net purchases from northbound capital were SMIC (00981), China Mobile (00941), and Hua Hong Semiconductor (01347). Conversely, GigaDevice (03986) and Alibaba-W (09988) saw the largest net outflows.
Northbound capital returned to accumulating chip stocks, with SMIC (00981) and Hua Hong Semiconductor (01347) receiving net purchases of HK$2.166 billion and HK$798 million, respectively. This move follows a Morgan Stanley research report suggesting that TSMC and Samsung are consolidating their mature process capacity, potentially creating opportunities for second-tier foundries. The report indicates that an upcycle for mature nodes is approaching. As AI infrastructure build-out may continue for another two years, some smartphone/PC clients are beginning to worry about potential capacity shortages in mature processes. The firm forecasts a shortage in mature node capacity could emerge in the second half of 2027.
China Mobile (00941) received a net purchase of HK$1.563 billion. Recently, the three major telecom operators introduced AI Token packages. Citigroup believes that as growth in traditional services weakens, AI Tokens provide a new revenue driver, potentially repositioning telecom operators from traditional network providers to foundational AI infrastructure suppliers. This shift could lead to a potential valuation re-rating for the three major operators.
Tencent (00700) was bought for a net HK$409 million. On May 19th, Tencent Cloud announced that the Hy3 preview and DeepSeek-V4-Pro models provided on its Agent development platform would end their limited-time free public testing and transition to official commercial services, with billing based on model usage. On May 20th, Tencent Cloud formally announced that, for the Agent era, it has completed a full-stack infrastructure upgrade integrating innovations from chip adaptation and computing power to models, security, and applications.
CNOOC (00883) saw a net purchase of HK$403 million. According to HFI Research, the oil market is expected to reach a significant turning point in the first week of June. If the Strait of Hormuz remains closed by then, the oil market could plunge into genuine panic. With global oil inventories falling to historic lows, countries worldwide might begin panic buying and hoarding oil.
Yangtze Optical Fibre and Cable (06869) received a net purchase of HK$216 million. Huatai Securities noted in a research report that optical fiber prices showed a month-over-month increasing trend in Q1 2026, with the company's delivery structure during the reporting period still including some low-priced long-term/centralized procurement contracts. As higher-priced orders are expected to be recognized starting in Q2, the firm is optimistic about an accelerated release of profit elasticity. It is positive that, driven by both the rising demand cycle in the core optical fiber and cable business and diversified segments like optical interconnection components, the company's performance is poised for significant enhancement.
Additionally, Montage Technology (06809) was bought for a net HK$204 million. In contrast, Alibaba-W (09988) and GigaDevice (03986) faced net selling of HK$168 million and HK$470 million, respectively.
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