Market sentiment improved on June 9, with Hong Kong stocks opening lower but then rising. The heavyweight leader, TENCENT, saw a notable movement, currently up over 4%. Meituan-W, Bilibili-W, and Kuaishou-W followed with gains, while BABA-W and Xiaomi Group-W experienced slight declines. The core Hong Kong AI tool, the Hong Kong Internet ETF Huabao (513770), saw its on-exchange price rise over 1%, marking consecutive gains from the bottom.
As of now, the valuation of the Hong Kong internet sector has retreated to historical lows. By June 8, the CSI Hong Kong Stock Connect Internet Index, which heavily weights leading internet companies, has fallen over 40% since the correction began on October 3, 2025. Its current trailing price-to-earnings (P/E) ratio is only 19.97 times, sitting at the 5.36th percentile of its range over the past five years. (Note: The index's annual performance over the last five complete years is as follows: 2021: -36.61%; 2022: -23.01%; 2023: -24.74%; 2024: 23.04%; 2025: 27.02%. Index constituent changes are made per its methodology, and its past performance does not indicate future results.)
On the news front, the WeChat Open Class yesterday released the "Guidelines for Developer Access to the WeChat AI Ecosystem." It stated that the WeChat Open Platform, while fully respecting developer rights and independent choice, provides developers with convenient access to the WeChat AI ecosystem. Developers can proactively authorize access. It is reported that JD.com is among the first batch for internal testing, planning to implement WeChat AI Agents around e-commerce, food delivery, and logistics services. Meituan also indicated last night that, as a first-batch internal testing team, it has previously collaborated with the WeChat team on joint development and testing for access.
Great Wall Securities stated that Hong Kong internet leaders and AI application companies possess strong earnings resilience and progress in AI business. Companies like TENCENT and Alibaba continue to increase investment in AI models and product development. For instance, Tencent's AI agent products CodeBuddy and WorkBuddy have achieved strong growth and high retention rates among active and paying users. Meanwhile, businesses like gaming and advertising maintain robust growth benefiting from AI empowerment. Alibaba's AI model and application services, including the Bailian MaaS platform, are expected to exceed an annual recurring revenue (ARR) of RMB 30 billion by year-end. The firm suggests focusing on subsequent opportunities shifting from high to low valuations and from hardware to software.
Guoyuan International expressed that the future focus of AI competition will shift towards systematic ecosystem development. An ecosystem possesses efficiently operating infrastructure (AI platforms), a continuous inflow of users, and a prosperous commercial environment that encourages innovation (developer community), which can provide enterprises with a cliff-like competitive advantage and long-term stable commercial returns. Platform-type internet leaders have inherent advantages in building AI ecosystems. Guoyuan International expects multiple rounds of market opportunities may emerge in infrastructure sectors, AI Agents, and AI platforms going forward.
Focus on the Value Re-rating of Hong Kong Internet Leaders Under AI Transformation
The Hong Kong Internet ETF Huabao (513770) and its feeder funds (Class A 017125; Class C 017126) passively track the CSI Hong Kong Stock Connect Internet Index. Its top ten holdings aggregate tech giants like BABA-W and TENCENT, along with AI application companies across various sectors, showcasing significant leadership advantages. It offers intraday T+0 trading with good liquidity.
An Alternative Strategy for Hong Kong Tech Exposure
For those optimistic about Hong Kong technology but seeking to reduce volatility, consider the first-of-its-kind in the market—the Hong Kong Large Cap 30 ETF Huabao (520560). It employs a "Tech + Dividend" barbell strategy, with holdings including high-growth tech stocks like Alibaba as well as stable, high-dividend stocks from banks and insurers, making it an ideal core holding tool for long-term Hong Kong market allocation.
Investment Considerations
A reminder: Recent market volatility may be significant, and short-term price movements do not indicate 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 Information
When subscribing for or redeeming fund units, the subscription/redemption agency may charge a commission of up to 0.5%, which includes related fees charged by stock exchanges and registration institutions. For the feeder funds: The Huabao CSI Hong Kong Stock Connect Internet ETF Feeder Fund (Class A) has a front-end subscription fee of RMB 1,000 per transaction for amounts over RMB 2 million, 0.6% for amounts between RMB 1 million (inclusive) and RMB 2 million, and 1% for amounts below RMB 1 million. 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 Hong Kong Internet ETF passively 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. Index constituents are adjusted per its methodology. Index constituents mentioned are for illustrative purposes only; descriptions of individual stocks are not investment advice of any form and do not 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 (including but not limited to stocks, commentary, forecasts, charts, indicators, theories, expressions of any form) is for reference only. Investors are responsible for any independent investment decisions. Furthermore, any views, analysis, or forecasts herein do not constitute investment advice of any kind to readers, nor shall they bear any responsibility for 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 carries risks; invest with caution.
Comments