On February 27, Hong Kong stocks strengthened during trading, with the Hang Seng Tech Index rising nearly 1.5% intraday before closing up 0.56%. Most leading internet companies ended higher, with AI application stocks leading the gains. Kingsoft Cloud surged over 10% at one point, closing up more than 7%. Bilibili-W and Tencent Holdings rose over 1%, while Meituan-W followed the upward trend. Alibaba-W climbed nearly 2% intraday before closing slightly down by 0.07%. The Hong Kong Internet ETF (513770), representing core AI assets in Hong Kong, recovered from early losses, with its price rising 1.47% during the session and closing up 0.21%.
The market movement followed news that Alibaba's personal AI assistant "Qianwen" is entering the AI hardware sector. After gaining popularity during the Spring Festival holiday through AI shopping features, Qianwen announced it will launch multiple AI hardware products globally this year, including AI glasses, AI rings, and AI earphones. Alibaba is reportedly developing Qianwen as an integrated software-hardware AI assistant compatible across various devices. Capabilities such as ordering food delivery and hailing rides via the Qianwen app will be seamlessly connected to hardware like AI glasses.
Since February, Hong Kong tech stocks, particularly heavyweight internet leaders, have experienced a sustained correction, with the CSI Hong Kong Stock Connect Internet Index falling over 12% during the period. Analysts note that changes in the external macroeconomic environment primarily drove this adjustment. The strengthening US dollar index raised concerns about global liquidity tightening, reducing risk appetite and triggering capital outflows from high-risk tech growth sectors, directly pressuring Hong Kong tech indices. Additionally, market worries persist about intense competition among tech giants in artificial intelligence.
Regarding this trend, Cao Xuchen, portfolio manager of the Hong Kong Internet ETF (513770), commented that the releases of Claude Opus 4.6 and Claude Sonnet 4.6 caused synchronized declines in Hong Kong internet stocks and US SaaS companies. However, he emphasized that large internet platforms focusing on platformization and self-developed large language models may be undervalued in the current AI wave, as these companies continue enhancing their competitive advantages.
From a valuation perspective, manager Feng Chencheng pointed out that the price-to-earnings ratio (TTM) of Hong Kong's internet sector has fallen to the 11th percentile of its five-year range. Companies with clear profit forecasts like Tencent Holdings—a sector valuation anchor—are at absolute valuation lows not seen in three years. Leading internet firms maintain advantages in technology, user access, ecosystems, and infrastructure. Soaring computational demands from open-source large models are driving robust demand for cloud computing services. Currently, market focus remains on the "race" in large model development and innovative AI applications. Long-term, the gap between major players in the AI race is unlikely to widen significantly, given comparable talent pools and capital reserves.
Looking ahead, GF Securities believes continuous declines in Hong Kong stocks have largely priced in negative sentiment. Positive catalysts could trigger a rebound driven by sentiment recovery and capital inflows.
To capture opportunities in what is considered the first year of AI commercialization in 2026, investors may focus on core AI tools in Hong Kong markets. The Hong Kong Internet ETF (513770) and its feeder funds (Class A: 017125; Class C: 017126) track the CSI Hong Kong Stock Connect Internet Index. Their top ten holdings—including Alibaba-W, Tencent Holdings, Xiaomi Group-W, Kuaishou-W, and Bilibili-W—account for over 76% of the portfolio, highlighting significant concentration in leading tech and AI application firms.
For exposure to Hong Kong tech with reduced volatility, investors may consider the Hong Kong Large-Cap 30 ETF (520560)—the first of its kind in the market. It employs a "tech + dividend" barbell strategy, combining high-growth tech stocks like Alibaba and Tencent Holdings with stable, high-dividend names such as China Construction Bank and Ping An Insurance, making it an ideal long-term core holding for Hong Kong equity allocations.
Investors are reminded that recent market volatility may be elevated, and short-term performance does not indicate future results. Investments should align with individual capital availability and risk tolerance, with careful attention to position sizing and risk management.
Data shows the CSI Hong Kong Stock Connect Internet Index recorded annual returns of -36.61% in 2021, -23.01% in 2022, -24.74% in 2023, 23.04% in 2024, and 27.02% in 2025. Index constituents are adjusted per its methodology, and past performance does not guarantee future results.
Institutional views cite GF Securities' February 9, 2026 report suggesting Hong Kong stocks may stage a rebound around the Spring Festival period, mirroring trends in A-shares.
ETF fees note: Subscription and redemption agents may charge up to 0.5% in commissions, including fees to exchanges and registration institutions. Feeder fund fees: Class A shares charge a 1% subscription fee for amounts under 1 million yuan, 0.6% for 1–2 million yuan, and a flat 1,000 yuan fee above 2 million yuan. Redemption fees are 1.5% for holdings under 7 days and 0% thereafter, with no sales service fee. Class C shares charge no subscription fee, with redemption fees of 1.5% for holdings under 7 days and 0% thereafter, plus a 0.3% annual sales service fee.
Risk disclosure: The Hong Kong Internet ETF tracks the CSI Hong Kong Stock Connect Internet Index, which has a base date of December 30, 2016, and was launched on January 11, 2021. Constituents are adjusted per index rules. Holdings mentioned are for illustrative purposes only and do not constitute investment advice or reflect actual fund positions. The fund manager assesses this ETF as R4 (medium-high risk), suitable for aggressive (C4) or higher risk-profile investors. All information provided is for reference, and investors are responsible for their own decisions. Views expressed do not constitute investment advice, and no liability is assumed for losses resulting from use of this content. Past performance of other funds managed by the issuer does not guarantee future results. All investments carry risk.
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