In early trading today (December 22, 2025), Hong Kong's technology sector continued its recovery, with strong performances in integrated circuits, chips, autonomous control, and humanoid robotics. This boosted trading activity in ETFs like the Hang Seng Tech ETF (513130), which focuses on Hong Kong-listed tech assets.
The recent rebound in Hong Kong's tech sector is largely attributed to easing liquidity risks. Southbound capital flows have accelerated, returning to net inflows, with a weekly net purchase of HK$16.274 billion last week—the highest since December—signaling renewed mainland investor confidence in Hong Kong stocks.
External liquidity conditions are also expected to improve. Federal Reserve officials indicated that with a weakening labor market and controlled inflation, there remains significant room for rate cuts, though aggressive action is unnecessary given the current economic outlook. Analysts at Galaxy Securities suggest that with recent central bank policy adjustments and potential Fed easing, external risks are narrowing, supporting a gradual upward trend for Hong Kong stocks. The tech sector, after recent corrections, appears attractively valued and may remain a key long-term investment theme.
Notably, despite market volatility, capital has flowed into Hong Kong tech ETFs. Since November 2025, such ETFs have attracted over HK$54.8 billion in inflows, with the Hang Seng Tech ETF (513130) alone drawing HK$5.6 billion and expanding its share count by 7.5 billion. The fund's total shares now stand at 59.897 billion, up 81% year-to-date, while its assets under management have surged 115% to HK$43.036 billion, making it a key tool for investors seeking exposure to Hong Kong's tech leaders.
AI commercialization has also gained momentum, with OpenAI reporting a sharp rise in profit margins to 70%, while Chinese tech giants rapidly advance multimodal and video-generation AI models, accelerating industrial adoption. These developments bolster confidence in AI's growth potential, benefiting the Hang Seng Tech Index, which includes major AI-focused internet and tech firms.
Valuations in Hong Kong's tech sector appear attractive after recent pullbacks. The Hang Seng Tech Index's current P/E ratio of 23.10x sits near the lower end of its five-year range (34.09th percentile). Compared to major U.S. and A-share tech indices—such as the Nasdaq (41.38x) and STAR 50 (155.42x)—the index offers relative value. Analysts note that despite short-term pressures, AI-driven growth, improving liquidity, and low valuations support a favorable long-term outlook for Hong Kong tech stocks.
The Hang Seng Tech ETF (513130) closely tracks the Hang Seng Tech Index, which includes top innovators like Meituan-W, Xiaomi Group-W, Tencent Holdings, NetEase-S, and SMIC. These firms lead in internet services, mobile payments, cloud computing, and AI, offering exposure to "soft tech" assets with unique appeal compared to China's hardware-focused A-share tech firms.
With policymakers emphasizing tech development and AI commercialization accelerating—coupled with improving Hong Kong liquidity—the tech sector remains a strategic long-term play. The Hang Seng Tech ETF (513130), with its large scale, high liquidity, T+0 trading, and low 0.2% annual fee, provides efficient access to Hong Kong's tech core.
Risk Disclosure: Investing involves risks. Investors should assess suitability based on risk tolerance and review fund documents, including prospectuses. Past performance does not guarantee future results. The Hang Seng Tech Index is compiled by Hang Seng Indexes Company, which disclaims liability for index accuracy.
Comments