Hong Kong's three major indices closed higher on September 21, with the Hang Seng Tech Index paring earlier gains to finish in positive territory. Internet heavyweights rallied across the board, with XIAOMI-W climbing more than 4%, BABA-W advancing over 3%, TENCENT rising above 2%, and MEITUAN-W gaining more than 1%. The benchmark index tracked by the Hong Kong Internet ETF Huabao (513770) closed up 1.72%.
The Hong Kong Internet sector has stabilized and recovered since dipping to its second-half low on September 17, notching three consecutive daily gains. With the Federal Reserve's rate hike decision now in the rearview mirror, interest rate volatility has declined, cooling the pessimistic sentiment driven by liquidity constraints. Institutions believe the Hong Kong market has scope for a near-term stabilization and rebound.
On September 21, the U.S. Treasury Secretary's remarks on Treasury buyback operations — aimed at boosting liquidity and managing the maturity structure — were interpreted by the market as a easing signal, attracting buying interest in global risk assets. Combined with the resumption of consultations between Chinese and American trade teams, sentiment in the Hong Kong market has entered a repair phase.
On the industry front, Alibaba's Apsara Conference opens tomorrow under the theme "Intelligence in Action," centered on Agentic AI, where Alibaba Cloud will unveil its core technologies and annual product lineup. New models, new agents, AI infrastructure upgrades, as well as AI product commercialization and customer adoption data are expected to draw market attention, providing fresh catalysts for the sector.
Shenwan Hongyuan Securities noted that the Apsara Conference is likely to reinforce market focus on the domestic agent and AI cloud industry trend. Both Alibaba and Tencent hold advantages in models, computing infrastructure, and high-frequency application entry points. As agents progressively move from demo stage into real production environments, model call volumes, inference demand, and enterprise AI spending are expected to keep growing, allowing Alibaba Cloud to benefit from the integrated "model + agent + cloud" trajectory. Additionally, investors should continue watching Tencent's closed loop of "model + application entry point + cloud."
Following the August pullback, Hong Kong Internet stocks have returned to an attractive valuation zone. As of September 18, the CSI Hong Kong Connect Internet Index traded at a price-to-earnings ratio (TTM) of 19.58 times, sitting at just the 6.23rd percentile over the past decade. With AI's continued development and accelerating commercialization, the Hong Kong Internet sector is poised to encounter strategic investment opportunities driven by both earnings growth and valuation repair.
The Hong Kong Internet ETF Huabao (513770) passively tracks the CSI Hong Kong Connect Internet Index, with heavyweight constituents including cloud giants such as BABA-W and TENCENT alongside AI application companies across various sectors. The top ten holdings collectively account for over 83% of the portfolio, reflecting strong leader concentration. The ETF supports intraday T+0 trading and offers solid liquidity. Off-market investors may consider the feeder funds (Class A 017125, Class C 017126).
Reminder: Recent market volatility may be elevated, and short-term gains or losses do not indicate future performance. Investors should make rational decisions based on their own capital positions and risk tolerance, with close attention to position sizing and risk management.
Risk disclosure: The Hong Kong Internet ETF Huabao and its feeder funds passively track the CSI Hong Kong Connect Internet Index, which has a base date of December 30, 2016, and was launched on January 11, 2021. The index recorded the following full-year performances over the past five years: 2025, 27.02%; 2024, 23.04%; 2023, -24.74%; 2022, -23.01%; 2021, -36.61%. The corresponding volatility levels were: 2025, 33.60%; 2024, 43.49%; 2023, 32.09%; 2022, 49.01%; 2021, 38.72%. Index constituent composition adjusts according to index compilation rules, and backtested historical performance does not indicate future index performance. Any information in this article, including but not limited to individual stocks, commentary, forecasts, charts, indicators, theories, or any form of expression, is provided for reference only. Investors bear full responsibility for their own investment decisions. Furthermore, any views, analysis, or forecasts herein do not constitute investment advice to readers, and no liability is assumed for direct or indirect losses arising from the use of this content. Performance of other funds managed by the fund manager does not guarantee the performance of this fund, and past performance does not represent future results. Fund investing involves risks, and caution is advised.
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