Amid fluctuating overseas conditions, Hong Kong stocks opened lower on April 9, with the Hang Seng Tech Index falling over 1%. Most leading internet companies saw pullbacks: Alibaba-W, which surged 6.75% yesterday, dropped nearly 3%; Xiaomi Group-W declined over 2%; Meituan-W dipped slightly by 0.62%; while Tencent Holdings bucked the trend to trade higher. The core Hong Kong AI tool—Huabao's Hong Kong Internet ETF (513770)—saw its on-market price fall by 1.59%.

In the short term, Hong Kong stocks may continue to fluctuate with overseas geopolitical developments. However, from a current perspective, the Hong Kong market presents multiple bright spots: compared to overseas markets, Hong Kong stocks have lower valuations and may experience relatively smaller impacts from liquidity shocks. Coupled with the conclusion of earnings season, the drag from profits has eased, allowing Hong Kong stocks to potentially advance with fewer burdens moving forward.

Synthesizing institutional views, several signals warrant close attention in the near future: clearer regulatory signals against internal competition; whether the new-generation Hunyuan and DeepSeek large models released in April can bolster confidence in Chinese technology; whether economic activity data during the peak season of March-April can again exceed expectations; and progress in US-Iran negotiations.

On the news front, latest earnings guidance from Hong Kong internet leader Alibaba indicates that the company's food delivery losses are expected to be halved this year, while its cloud business growth rate is projected to exceed 40% for the first time in history. Additionally, Alibaba announced AI-related organizational adjustments yesterday, including establishing a new group technology committee and upgrading the Tongyi large model division to accelerate AI development. Furthermore, "Happy Horse-1.0" topped the AI video rankings, surpassing Seedance, with multiple sources confirming its likely origin from Alibaba's Taotian Group.

Cao Xuchen, portfolio manager of Hong Kong Internet ETF (513770), pointed out that as earnings recovery gains verification, coupled with strengthening AI narratives and accelerating AI commercialization processes, the fundamentals of Hong Kong internet stocks are expected to gradually improve starting from the second quarter, making current bottom allocation particularly valuable.

To capture the 2026 AI commercialization milestone, focus on core Hong Kong AI tools. 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, with top ten holdings aggregating tech giants like Alibaba-W and Tencent Holdings alongside AI application companies across various sectors, demonstrating significant leading advantages. The ETF features T+0 trading with strong liquidity.

For investors bullish on Hong Kong tech but seeking reduced volatility, consider the market's first Hong Kong Large Cap 30 ETF (520560), which employs a "tech + dividend" barbell strategy. Its portfolio combines high-growth tech stocks like Alibaba with stable high-dividend bank and insurance stocks, making it an ideal long-term foundational holding for Hong Kong market exposure.

Reminder: Recent market volatility may be significant, and short-term price movements do not indicate future performance. Investors must make rational investment decisions based on their capital situation and risk tolerance, paying close attention to position and risk management.

Data source: Shanghai and Shenzhen Stock Exchanges, etc.

ETF fee explanation: When subscribing or redeeming fund shares, subscription/redemption agents may charge commissions up to 0.5%, including relevant fees collected by stock exchanges and registration institutions. Feeder fund fee explanation: Huabao CSI Hong Kong Stock Connect Internet ETF Feeder Fund (Class A) subscription fee (front-end load) is CNY 1,000 per transaction for subscriptions over CNY 2 million, 0.6% for CNY 1-2 million, and 1% below CNY 1 million; redemption fee is 1.5% for holdings under 7 days, 0% for 7+ days; no sales service fee charged. Huabao CSI Hong Kong Stock Connect Internet ETF Feeder Fund (Class C) charges no subscription fee; redemption fee is 1.5% for holdings under 7 days, 0% for 7+ days; sales service fee is 0.3%.

Risk disclosure: Hong Kong Internet ETF passively tracks the CSI Hong Kong Stock Connect Internet Index (base date: 2016.12.30, launch date: 2021.1.11), with constituent adjustments per index methodology. Index constituents shown are for illustrative purposes only; individual stock descriptions do not constitute investment advice nor represent any fund's holdings or trading activities. The fund manager assesses this fund's risk level as R4-medium high risk, suitable for aggressive (C4) and higher risk tolerance investors. All information presented constitutes reference material only, and investors remain responsible for independent investment decisions. Views, analyses and forecasts do not constitute investment advice, and no liability is accepted for direct/indirect losses from using this content. Other funds' performance does not guarantee this fund's results; past performance doesn't indicate future returns; fund investment carries risks requiring careful consideration.

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