Hong Kong stocks opened higher on the morning of July 29, with major internet leaders collectively strengthening. As of writing, Xiaomi Group-W (1810.HK) led the gains with a 7% rise, Bilibili-W (9626.HK) climbed over 3%, Meituan-W (3690.HK) rose more than 2%, and Tencent Holdings (0700.HK) and Alibaba Group-W (9988.HK) both advanced over 1%. The Hong Kong Internet ETF (513770), which heavily weights these internet leaders, traded higher after opening, with its price now up 3.85%, reclaiming its 60-day moving average.

On the news front, Xiaomi is scheduled to hold a technology launch event on the evening of July 30, where it will officially introduce the "Xiaomi Kunlun Technology Architecture" along with two new extended-range SUVs: the Xiaomi SU7 N90 Max and the Xiaomi SU7 N70 Max. Goldman Sachs believes that Xiaomi's ecosystem expansion under its "Human x Car x Home" strategy is still in its early stages. The company's robust balance sheet, ecosystem integration capabilities, economies of scale, and cost advantages from deep supply chain involvement are expected to continuously strengthen its competitiveness, potentially building the world's largest consumer-grade physical AI ecosystem.

Additionally, on July 27, Cxmt Corporation (688825) officially debuted on the STAR Market (科创板). On its first day of trading, the stock surged sharply, closing 465.82% higher. According to a previous announcement from Cxmt, a wholly-owned subsidiary of Xiaomi Technology participated in Cxmt's strategic placement, securing 18.2448 million shares. Based on the issue price of 8.66 yuan per share, the paper profit on the first day of trading amounted to approximately 736 million yuan.

The combination of improving fundamental conditions in the industry and low valuations is creating a positive resonance. Incorporating positive signals from domestic large model iterations, agent application data, and forward-looking earnings reports from internet giants, the Hong Kong internet sector has recently experienced a three-pronged recovery logic:

First, a style rotation within the tech sector, with capital rebalancing from AI hardware towards undervalued internet assets. Second, the accelerated implementation of AI cloud, models, and agents is heating up platform commercialization expectations. Third, delivery subsidies and platform spending are becoming more restrained, easing concerns about profit damage.

Moving forward, investors should monitor the sustainability of earnings delivery, AI commercialization, and capital flows. CITIC Securities stated that the strength of Hong Kong internet stocks since July has been driven by two main rebalancing themes: Structurally, excessive hardware positions are being unwound as expectations for Hyperscaler model commercialization improve, with capital shifting from hardware to cloud and applications. In terms of flows, foreign investors remain underweight China and the internet sector, leaving fund flows at a low level, while southbound capital has maintained steady inflows. As China's AI narrative becomes clearer, the investment bank is bullish on the recovery and convergence trend in Hong Kong internet stocks, suggesting a focus on the value reassessment of these leading companies amid the AI transformation.

The Hong Kong Internet ETF (513770) and its feeder funds (Class A: 017125; Class C: 017126) passively track the CSI Hong Kong Stock Connect Internet Index. Its top ten holdings include major tech giants like Alibaba Group-W and Tencent Holdings, along with AI application companies across various sectors, providing significant market leadership advantages. The ETF supports same-day T+0 trading and offers good liquidity.

For investors bullish on Hong Kong tech but looking to reduce volatility, the first such product on the market—the HUABAO HONG KONG STOCK CONNECT HANG SENG CHINA (HONG KONG LISTED) 30 EXCHANGE TRADED OPEN ENDED INDEX SECURI (520560)—is also worth considering. It employs a "Tech + Dividends" barbell strategy, with major holdings including high-growth tech stocks like Alibaba as well as stable, high-dividend sectors such as banking and insurance, making it an ideal tool for long-term positioning in Hong Kong stocks.

Reminder: Recent market volatility may be significant, and short-term price movements do not predict future performance. Investors must invest rationally based on their own capital positions and risk tolerance, paying close attention to position management and risk control.

Data sources: Shanghai and Shenzhen Stock Exchanges, etc. ETF fee notes: When subscribing for or redeeming fund shares, subscription and redemption agents may charge a commission of up to 0.5% of the standard rate, which includes fees charged by the stock exchange, registration institution, and others. Feeder fund fee notes: For the Huabao CSI Hong Kong Stock Connect Internet ETF Feeder Fund (Class A), the subscription fee rate (front-end load) is 1,000 yuan per transaction for subscription amounts over 2 million yuan, 0.6% for amounts between 1 million yuan (inclusive) and 2 million yuan, and 1% for amounts under 1 million yuan. Redemption fee rates are 1.5% for holding periods under 7 days and 0% for holding periods of 7 days (inclusive) or more; no sales service fee is charged. For the Huabao CSI Hong Kong Stock Connect Internet ETF Feeder Fund (Class C), no subscription fee is charged, redemption fee rates are 1.5% for holding periods under 7 days and 0% for holding periods of 7 days (inclusive) or more, and the sales service fee is 0.3%.

Risk Warning: The Hong Kong Internet ETF (513770) and its feeder funds passively track the CSI Hong Kong Stock Connect Internet Index. The base date of this index is December 30, 2016, and it was published on January 11, 2021. The composition of the index's constituent stocks is adjusted according to the index's compilation rules. The constituent stocks mentioned in this article are for illustrative purposes only. Descriptions of individual stocks do not constitute investment advice of any kind and do not represent the holdings or trading intentions of any fund managed by the fund manager. The fund manager assesses the risk level of this fund as R4 (medium-high risk), suitable for aggressive (C4) and above investors. 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. Investors must take full responsibility for their own investment decisions. Furthermore, any views, analyses, or forecasts in this article do not constitute investment advice to readers and shall not be held liable for any 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. Past performance of a fund does not represent its future performance. Fund investment carries risks, and fund investment must be conducted with caution.