On February 25, mainland capital recorded a net sell-off of HK$4.06 billion in the Hong Kong stock market. Specifically, the Shanghai-Hong Kong Stock Connect saw net outflows of HK$5.50 billion, while the Shenzhen-Hong Kong Stock Connect registered net inflows of HK$1.44 billion.

The most heavily bought stocks by mainland investors were TENCENT (00700), MEITUAN-W (03690), and BABA-W (09988). In contrast, the Tracker Fund (02800), Hang Seng China Enterprises Index Fund (02828), and COSCO SHIP ENGY (01138) faced the largest net sell-offs.

TENCENT (00700) attracted net purchases of HK$818 million. Recent data from the Spring Festival AI competition highlighted the company's strategic focus on ecosystem positioning: its AI platform Yuanbao achieved a monthly active user base of 114 million, with daily active users peaking at over 50 million. First Shanghai noted that while Yuanbao did not experience explosive user growth, it prudently avoided inefficient spending on user acquisition. The core strategy revolves around building a social network as an AI asset, laying the groundwork for future large-scale deployment of AI agents within WeChat and strengthening ecosystem barriers.

BABA-W (09988) received net inflows of HK$606 million. On February 25, following the open-sourcing of Qwen3.5-397B-A17B on New Year’s Eve, Alibaba continued to release additional models in the Qwen3.5 series. The latest open-source offerings include three mid-sized models: Qwen3.5-35B-A3B, Qwen3.5-122B-A10B, and Qwen3.5-27B. Qwen3.5-Flash has already been launched on Alibaba Cloud’s Bailian platform, with input costs as low as RMB 0.2 per million tokens.

YOFC (06869) saw net buying of HK$182 million. Driven by the global shift in large AI models from a "parameter race" to a "productivity race," demand for optical modules—a core component of computing hardware infrastructure—has surged. Huaxi Securities indicated that the sharp increase in capital expenditure by cloud providers is positively impacting the entire supply chain. According to reports from "China Optics Valley," leading companies such as Huagong Tech and YOFC maintained production operations throughout the Spring Festival holiday.

SMIC (00981) garnered net purchases of HK$168 million. The company expects its 2026 revenue growth to outpace the industry average, while capital expenditure is projected to remain largely consistent with 2025 levels. SMIC disclosed that its 2025 capital expenditure reached US$8.10 billion, exceeding initial forecasts. CEO Zhao Haijun attributed the increase to strong customer demand, changes in the external environment, and extended equipment delivery times.

Mainland investors reduced their exposure to Hong Kong ETFs, with the Tracker Fund (02800), Hang Seng China Enterprises Index Fund (02828), and CSOP Hang Seng Tech Index ETF (03033) experiencing net sell-offs of HK$4.41 billion, HK$1.14 billion, and HK$300 million, respectively. Tianfeng Securities noted that in the short term, Hong Kong stocks are likely to remain volatile after a recent valuation rebound. Continued net inflows from southbound capital and structural market activity are expected to provide some support, with indices maintaining resilience and selective opportunities. However, external constraints persist. Over the medium term, the outlook for Hong Kong stocks remains cautiously optimistic, with structural performance likely to continue outpacing broad index movements.

COSCO SHIP ENGY (01138) saw its shares rise before retreating, ending the day with a net sell-off of HK$357 million by mainland investors. During the Spring Festival, VLCC freight rates exceeded expectations, driving further gains in overseas tanker stocks. Guosheng Securities pointed out that if sanctions tighten further, Far East importers may increasingly shift to compliant crude oil markets. This could lead to declining operational efficiency and profitability for sanctioned vessels, while compliant markets stand to benefit.

MEITUAN-W (03690) and Xiaomi Group-W (01810) attracted net inflows of HK$677 million and HK$538 million, respectively. In contrast, CNOOC (00883) faced a net sell-off of HK$87.59 million.