Hang Seng Index Series Adjustments: INNOVENT BIO is added to the Hang Seng Index; YUM CHINA, INNOVENT BIO, and China Hongqiao are included in the Hang Seng China Enterprises Index, while ENN Energy, NEW ORIENTAL-S, and Haidilao are removed. Leapmotor is added to the Hang Seng TECH Index, with ASMPT being excluded.

Fund Flow Estimates: Positive impacts are expected for INNOVENT BIO, YUM CHINA, China Hongqiao, and Leapmotor, while ASMPT, ENN Energy, and NEW ORIENTAL-S may face negative effects.

Stock Connect Adjustments: Chery Automobile (9973.HK), FWD Group (1828.HK), Aux International (2580.HK), and Innovent Biologics-B (2591.HK) are expected to meet the inclusion criteria for the Stock Connect program.

Implementation Timeline: The index adjustments will take effect on December 8 (Monday). Passive funds are likely to rebalance on December 5 (the previous trading day) to minimize tracking error.

Main Text: On November 21, 2025, after market close, Hang Seng Indexes Company announced its quarterly index review results (with the review cutoff date being September 30, 2025, typically released within eight weeks). The adjustments cover major flagship indices such as the Hang Seng Index, Hang Seng China Enterprises Index, and Hang Seng TECH Index. Additionally, partial adjustments were made to the Hang Seng Composite Index, which directly determines the investable universe for Stock Connect. Here’s a comprehensive analysis for investors.

Hang Seng Index Series Adjustments: - Hang Seng Index: INNOVENT BIO is included with a 0.91% weighting. No stocks were removed, increasing the total constituents to 89. - Hang Seng China Enterprises Index: YUM CHINA, INNOVENT BIO, and China Hongqiao are added with weightings of 1.30%, 1.21%, and 0.91%, respectively. ENN Energy, NEW ORIENTAL-S, and Haidilao are excluded, with pre-removal weightings of 0.49%, 0.28%, and 0.24%. The number of constituents remains at 50. - Hang Seng TECH Index: Leapmotor is included with a 0.98% weighting, while ASMPT is removed (pre-removal weighting: 0.66%). The constituent count stays at 30.

Fund Flow Estimates: Based on Bloomberg data, ETFs tracking the Hang Seng Index, Hang Seng China Enterprises Index, and Hang Seng TECH Index have assets under management of approximately $29.2 billion, $7.59 billion, and $32.61 billion, respectively. Considering weighting changes and three-month average daily trading volumes, the estimated passive fund flows are: 1) Hang Seng Index: INNOVENT BIO could see inflows of ~$266 million, requiring ~1.3 trading days. HSBC and China Construction Bank may experience outflows of ~$155 million and ~$146 million, respectively, due to weighting adjustments. 2) Hang Seng China Enterprises Index: YUM CHINA, INNOVENT BIO, and China Hongqiao may attract inflows of ~$91.86 million, ~$98.70 million, and ~$69.09 million, respectively. ENN Energy, NEW ORIENTAL-S, and Haidilao could face outflows of ~$37.20 million, ~$21.26 million, and ~$18.22 million. 3) Hang Seng TECH Index: Leapmotor may receive ~$320 million in inflows, while ASMPT could see ~$220 million in outflows.

Stock Connect Adjustments: Four stocks—Chery Automobile (9973.HK), FWD Group (1828.HK), Aux International (2580.HK), and Innovent Biologics-B (2591.HK)—are expected to qualify for Stock Connect inclusion. Hesai-W (2525.HK) and Geekplus-W (2590.HK), due to their weighted voting rights structure, require six months of listing and 20 trading days before eligibility, delaying their potential inclusion to next year.

Post-Adjustment Index Characteristics: - Healthcare and industrial sectors see increased representation in the Hang Seng Index, while financials and consumer sectors decline. - The new economy’s weighting rises slightly from 51.3% to 51.5%. - Healthcare coverage expands from 34.5% to 40.0%, with sector weightings increasing from 2.9% to 4.0% (healthcare) and 8.8% to 9.1% (industrials). Financials and consumer sectors drop from 33.6% to 32.9% and 27.4% to 26.4%, respectively.

Implementation Timeline: The adjustments will take effect on December 8. Active funds may engage in arbitrage strategies, while passive funds are expected to rebalance on December 5, potentially causing significant trading volume spikes, especially near market close.