On the afternoon of July 16th, leading Hong Kong-listed internet stocks maintained their strength. At the time of writing, Kuaishou-W and Xiaomi Group-W shares were both up more than 7%, Meituan-W gained nearly 6%, Alibaba-W rose over 4%, and Tencent Holdings advanced close to 3%.
Additionally, Maifushi surged 30% following its earnings preview, which indicated that its AI application business revenue for the first half of the year is expected to reach between 1.068 billion and 1.180 billion yuan, representing a year-on-year growth of 112% to 134%.
The Hong Kong Internet ETF Huabao (513770), which holds a significant position in these internet leaders, saw its on-exchange price jump 5.51%, briefly ranking as the top gainer among all ETFs in the market in terms of intraday gains.
Market Catalysts and Company Developments
The market rally is supported by several catalysts. Cyberspace authorities recently completed the filing and public announcement for seven mobile device-side generative AI services, with Xiaomi's MiMo on-device model included on the list. According to Xiaomi's official introduction, MiMo is the company's self-developed large language model, which has completed a closed-loop matrix covering large language, multimodal, and voice models, establishing a comprehensive technical foundation. According to a previous announcement, Xiaomi plans to invest 16 billion yuan in the AI field by 2026, with cumulative investments in AI over the next three years not less than 60 billion yuan.
Alibaba's Qianwen will be integrated as an AI capability into Apple Intelligence, providing Chinese users of iOS, iPadOS, macOS, and visionOS with capabilities such as text understanding, image understanding, and content generation. Users can directly access these features within Apple devices without switching between applications.
Furthermore, one week after the release of Tencent's Hunyuan Hy3 model, its total call volume achieved an increase of over 68 times compared to the previous generation Hy2, and it has topped the global large model call volume leaderboard on OpenRouter.
Analyst Perspectives and Market Dynamics
Morgan Stanley pointed out that the potential AI revenue space for cloud providers is far from being fully priced in by the market, with the AI narrative's focus shifting from hardware devices towards cloud providers.
Galaxy Securities noted that the recent rebound in Hong Kong stocks is the result of a combination of strong southbound capital buying and a weakening of foreign short-selling pressure. Among these factors, the concentrated inflow of southbound funds into AI/internet leaders indicates a contrarian strategy of "buying the dip" to bet on the long-term logic of China's AI industry, also reflecting a domestic capital rotation from hardware to software and from high-valuation to low-valuation sectors.
Focus on Value Reassessment of HK Internet Leaders
Attention is drawn to the value reassessment of Hong Kong-listed internet leaders under 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-W and Tencent Holdings alongside AI application companies across various sectors, demonstrating significant leadership advantages. The ETF offers intraday T+0 trading with good liquidity.
Alternative Investment Strategy
For those bullish on Hong Kong tech but seeking to reduce volatility, the market's first Hong Kong Large Cap 30 ETF Huabao (520560) can be considered. It employs a "tech + dividend" barbell strategy, with its portfolio including high-growth tech stocks like Alibaba alongside stable, high-dividend stocks from sectors like banking and insurance, making it an ideal long-term core holding for Hong Kong market exposure.
Important Investment Considerations
Investors are reminded that recent market volatility may be significant, and short-term price movements do not predict future performance. It is essential to invest rationally based on one's own financial situation and risk tolerance, paying high attention to position sizing and risk management.
Data source: Shanghai and Shenzhen Stock Exchanges, etc. The base date for the CSI Hong Kong Stock Connect Internet Index is December 30, 2016, and it was published on January 11, 2021. The index's constituent stocks are adjusted according to its compilation rules, and its historical back-tested performance does not indicate future index performance. The index's annual returns for the past five full years are: 2025, 27.02%; 2024, 23.04%; 2023, -24.74%; 2022, -23.01%; 2021, -36.61%. Its annual volatility for the past five full years are: 2025, 33.60%; 2024, 43.49%; 2023, 32.09%; 2022, 49.01%; 2021, 38.72%.
ETF fee-related information: When subscribing for or redeeming fund shares, subscription/redemption agents may charge a commission of up to 0.5%, which includes relevant fees charged by stock exchanges and registration institutions. Feeder fund fee-related information: For the Huabao CSI Hong Kong Stock Connect Internet ETF Feeder Fund (Class A), the front-end subscription fee is a flat 1000 yuan per transaction for subscriptions over 2 million yuan, 0.6% for subscriptions between 1 million yuan (inclusive) and 2 million yuan, and 1% for subscriptions below 1 million yuan. The redemption fee is 1.5% for holding periods under 7 days and 0% for holding periods of 7 days or more. No sales service fee is charged. For the Huabao CSI Hong Kong Stock Connect Internet ETF Feeder Fund (Class C), no subscription fee is charged. The redemption fee is 1.5% for holding periods under 7 days and 0% for holding periods of 7 days or more. The sales service fee is 0.3%.
Risk Disclosure: The Hong Kong Internet ETF Huabao and its feeder funds passively track the CSI Hong Kong Stock Connect Internet Index. The base date for this index is December 30, 2016, and it was published on January 11, 2021. The index's constituent stocks are adjusted according to its compilation rules. The index constituents mentioned in this article are for illustrative purposes only. Descriptions of individual stocks do not constitute investment advice in any form, nor do they represent the holdings or trading动向 of any fund managed by the fund manager. The fund manager assesses the risk rating of this fund as R4 (Medium-High Risk), suitable for aggressive (C4) and above investors. Any information appearing in this article is for reference only. Investors are solely responsible for any independent investment decisions. Furthermore, any views, analysis, or forecasts in this article do not constitute investment advice 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 the performance of this fund. Past fund performance does not indicate future results. Fund investment involves risks, and caution is required when investing in funds.
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