On October 14, low-valuation Hong Kong internet leaders staged a rally, with Xiaomi Group-W (01810) rising more than 5%, Meituan-W (03690) gaining over 4%, and Alibaba-W (09988) up nearly 3% as of press time.
The Hong Kong Internet ETF Hua Bao (513770) opened lower but moved higher, with its underlying index climbing 1.5%. A bottoming out of valuations combined with positive fundamental signals may be the main drivers behind the rally. As of October 8, the CSI Hong Kong Connect Internet Index tracked by the Hong Kong Internet ETF Hua Bao (513770) had a price-to-earnings ratio (TTM) of only 19.66 times, sitting at a historical bottom in the 6.69th percentile over the past 10 years.
Meanwhile, with third-quarter earnings disclosures imminent, leading companies such as Alibaba (BABA) are releasing positive signals. Alibaba's earnings guidance shows that Alibaba Cloud continues to accelerate growth, while the profit side of its core e-commerce business exceeded expectations. In the first month following the launch of Xiaomi's (XIACY) automobile Pengcheng series, locked orders surpassed 70,000 units, directly driving Xiaomi's overall September deliveries past 40,000 units for the first time.
CITIC Securities stated that current Hong Kong earnings expectations have begun to stabilize and revise upward, with valuation attractiveness gradually emerging. A series of upcoming domestic policies are expected to drive a return of positive wealth effects and a recovery in domestic demand, favoring a "performance plus valuation" double-boost rally for Hong Kong stocks in the fourth quarter.
On the AI main line, Hong Kong AI focuses on cloud vendor leaders, large models, and application segments. Against the backdrop of continuous profit realization in overseas application segments, the Hong Kong internet sector is expected to benefit from the mapping of the overseas AI application rally. Coupled with capital rotating from highly crowded hardware names toward lower positions, the Hong Kong internet sector, having fallen relatively deeply earlier, has room for a rebound.
The Hong Kong Internet ETF Hua Bao (513770) passively tracks the CSI Hong Kong Connect Internet Index, heavily weighting internet leaders. Its top two holdings, Tencent Holdings and Alibaba-W, together account for over 30% weight, while the top ten constituent stocks combined represent over 80%, highlighting a significant leader advantage. It supports intraday T+0 trading with good liquidity. Off-exchange investors may consider the feeder funds (Class A 017125, Class C 017126).
Reminder: Recent market volatility may be relatively large, and short-term price movements do not predict future performance. Investors must invest rationally based on their own financial situation and risk tolerance, paying close attention to position and risk management. Data source: Shanghai and Shenzhen Stock Exchanges, Wind, etc. ETF fee-related notes: When investors subscribe or redeem fund shares, the subscription and redemption agent may charge a commission of no more than 0.5%, which includes fees charged by stock exchanges and registration institutions. Feeder fund fee-related notes: Hua Bao CSI Hong Kong Connect Internet ETF Initiating Feeder Fund (Class A) subscription fee (front-end) is 1,000 yuan per transaction for subscription amounts of 2 million yuan or more, 0.6% for 1 million yuan (inclusive) to 2 million yuan, and 1% for amounts below 1 million yuan; the redemption fee is 1.5% for holding periods of less than 7 days and 0% for holding periods of 7 days (inclusive) or more; no sales service fee is charged. Hua Bao CSI Hong Kong Connect Internet ETF Initiating Feeder Fund (Class C) does not charge a subscription fee, with a redemption fee of 1.5% for holding periods of less than 7 days and 0% for holding periods of 7 days (inclusive) or more; the sales service fee is 0.3%.
Risk disclosure: The Hong Kong Internet ETF Hua Bao and its feeder funds passively track the CSI Hong Kong Connect Internet Index, whose base date is December 30, 2016, and which was published on January 11, 2021. The CSI Hong Kong Connect Internet Index's returns over the past five complete fiscal years were: 2025, 27.02%; 2024, 23.04%; 2023, -24.74%; 2022, -23.01%; 2021, -36.61%. Its volatility over the past five complete fiscal years was: 2025, 33.60%; 2024, 43.49%; 2023, 32.09%; 2022, 49.01%; 2021, 38.72%. The constituent stocks of the index are adjusted from time to time according to the index compilation rules, and their back-tested historical performance does not predict the index's future performance. The index constituent stocks mentioned in this article are for display purposes only, and individual stock descriptions do not constitute investment advice of any form, nor do they represent the holdings or trading activities of any fund under the manager. The risk level of this fund as assessed by the fund manager is R4-medium-high risk, suitable for investors with an aggressive profile (C4) and above. Any information appearing in this article (including but not limited to individual stocks, comments, forecasts, charts, indicators, theories, and any form of expression) is for reference only, and investors are responsible for their own investment decisions. In addition, any views, analyses, and forecasts in this article do not constitute investment advice of any form to readers, nor shall they bear any responsibility for direct or indirect losses arising from the use of the content herein. The performance of other funds managed by the fund manager does not constitute a guarantee of the fund's performance. Past performance of a fund does not represent its future performance. Fund investment involves risk, and caution is required. MACD golden cross signals have formed, and these stocks are performing well!
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