Hang Seng Indexes Company today (October 7) released the consultation conclusions on the proposed revisions to the compilation methodology of the Hang Seng TECH Index, according to Zhitong Finance APP.

After gathering views from various market segments and following review and deliberation by the Hang Seng Index Advisory Committee, Hang Seng Indexes Company announced that it will implement six revisions across two major directions: 1) broadening technology theme coverage; and 2) introducing a grouped stock selection mechanism.

Broadening technology theme coverage

The previously proposed revision to remove the industry requirement was adopted, eliminating the stipulation that eligible candidate companies must belong to five designated industries under the Hang Seng Industry Classification System.

The previously proposed revision to the six major technology themes was adopted, consolidating and expanding the existing themes while adding a new frontier technology theme. The revised six major technology themes are: 1) digital platforms and solutions; 2) artificial intelligence; 3) advanced hardware; 4) robotics and automation; 5) cloud; and 6) frontier technology.

The previously proposed revision to expand technology sub-themes from 16 to 24 was adopted, increasing the number of technology sub-themes from 16 to 24 to align with the revisions to the six major technology themes mentioned above.

Introducing a grouped stock selection mechanism

The previously proposed revision to set the selection universe as constituents of the Hang Seng Composite LargeCap & MidCap Index was adopted, revising the selection universe from companies listed on the Main Board to constituents of the Hang Seng Composite LargeCap & MidCap Index.

An adjustment was made on the basis of the previously proposed revision, adopting a dual-group stock selection mechanism that uses market capitalization ranking and revenue growth ranking as separate selection criteria. Non-existing constituents must additionally meet a requirement of a minimum average daily turnover of HK$100 million over the past three months; constituents selected by revenue growth ranking must have recorded annual revenue of at least HK$500 million in each of the most recent two consecutive financial years.

The previously proposed revision to increase the number of constituents from 30 to 50 was adopted, with the top 40 selected by market capitalization ranking and the remaining 10 selected by revenue growth ranking over the past twelve months.

The above revisions will be implemented in the index review for the period ending September 30, 2026, and will take effect in the index rebalancing in December 2026.

Hang Seng Indexes Company launched a market consultation on the proposed revisions in August this year for approximately one month, and received responses from industry stakeholders in Hong Kong, the mainland and other regions, covering asset management companies, traders and market makers, structured product issuers, corporates and industry organizations, among others. The consultation results showed that each proposal received support from more than 80% of responding parties.