Recently, the Hong Kong stock market, which opened lower, saw a sharp increase in leading tech stocks. As of this report, MEITUAN-W has gained over 2%, with Alibaba-W and Tencent Holdings also experiencing upward momentum. The Hong Kong Internet ETF (513770), heavily invested in leading internet companies, rebounded from earlier declines, currently showing a slight decrease of 0.34% after being down nearly 2% at one point. The premium level remains high, with a real-time premium rate of 0.32%, indicating active buying interest in the dips.

In recent days, while the Hong Kong stock market has shown increased volatility, capital flow has demonstrated confidence with a net inflow. Data from the Shanghai Stock Exchange reported a net inflow of 56.7 million yuan into the Hong Kong Internet ETF (513770) during the recent pullback, bringing the total net inflow over the past ten days to 196 million yuan.

Huatai Securities indicated that the current suppressive factors in the Hong Kong market are more about emotional shocks rather than fundamental reversals. They recommend shifting from a broad-based rally mindset to focusing on fundamental realizations, particularly in technology hardware with upward revisions in earnings expectations, pharmaceuticals with significant price corrections, leading internet firms, and consumer stocks with stable ROE and revenue stabilization.

According to Huaxi Securities, looking ahead, short-term positives include expectations for the restoration of U.S.-China relations, while uncertainty remains regarding the impact of a stronger U.S. dollar on Hong Kong stocks. This suggests that while betting on tech rebounds in the Hong Kong market, one may need to tolerate potential volatility. In the medium to long term, the AI cycle's enhancement of sectors like internet and healthcare has yet to be fully priced in, and the push from internet giants in AI is ongoing, suggesting that recent corrections could provide good configuration opportunities.

The Hong Kong Internet ETF (513770) and its associated funds (Class A 017125; Class C 017126) track the CSI Hong Kong Stock Connect Internet Index. The top three holdings are Alibaba-W, Tencent Holdings, and Xiaomi Group-W, with weightings of 18.11%, 16.16%, and 11.067% respectively. The top ten holdings combine major internet firms from various sectors, accounting for over 72% of the total weight, showcasing strong leading advantages as core stakes in Hong Kong's AI landscape.

Since the beginning of this year, boosted by the AI concept, the internet sector has shown significantly higher elasticity, with the CSI Hong Kong Stock Connect Internet Index significantly outperforming the Hang Seng Tech Index.

Additionally, the valuation of the internet sector remains lower, with the latest price-to-earnings (PE) ratio of the CSI Hong Kong Stock Connect Internet Index at just 23.69 times, which is at a mid-low level within the 21.08% quantile over the past decade. This not only clearly outperforms U.S. and A-share tech valuations but is also lower than the historical percentiles of 25.37% for the same period of the Hang Seng Tech Index.

The latest assets under management for the Hong Kong Internet ETF (513770) have surpassed 10 billion yuan, with an average daily trading volume exceeding 600 million yuan this year. It supports intraday T+0 trading and is not subject to QDII quota restrictions, providing good liquidity! Caution: The recent market fluctuations may be significant, and short-term movements do not indicate future performance. Investors are advised to make rational decisions based on their financial status and risk tolerance, keeping a close eye on their positions and risk management.

Data sources: Shanghai and Shenzhen stock exchanges, etc. The annual performance of the CSI Hong Kong Stock Connect Internet Index over the past five years is as follows: 2020, 109.31%; 2021, -36.61%; 2022, -23.01%; 2023, -24.74%; 2024, 23.04%. The index composition is updated according to the index compilation rules, and its past performance does not guarantee future results.

Risk warning: The Hong Kong Internet ETF passively tracks the CSI Hong Kong Stock Connect Internet Index, with a base date of 2016.12.30, published on 2021.1.11. The composition of the index is adjusted based on its compilation rules. Stocks mentioned in this article are for display purposes only, and individual stock descriptions do not constitute any form of investment advice or represent the holdings and trading directions of any funds managed by the issuer. The fund manager rates the risk level of this fund as R4 - medium to high risk, suitable for aggressive investors (C4) and above. Any information presented in this article (including but not limited to stocks, comments, predictions, charts, indicators, theories, and any form of expression) is for reference only, and investors must assume responsibility for their own investment decisions. Furthermore, any opinions, analyses, and forecasts expressed in this article do not constitute investment advice in any form and the author does not 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 the performance of this fund, and past performance does not indicate future results. Investing in funds involves risks; invest cautiously.