Southbound capital increased its holdings in SMIC by over 80 million shares this week. From May 26 to May 29, the main indices of the Hong Kong stock market showed mixed performance. The Hang Seng Index fell by 1.65%, while the Hang Seng Tech Index rose by 0.3%, and the Hang Seng China Enterprises Index declined by 1.46%. According to statistics, the total net purchase of southbound funds for the week amounted to HKD 808 million. Seventeen stocks were featured on the list of actively traded stocks by southbound funds this week. Among them, SMIC recorded the highest total trading volume via the Stock Connect, reaching HKD 70.899 billion. Other stocks, including Hua Hong Semiconductor, Tencent Holdings, and Alibaba-W, also saw their total Stock Connect trading volumes exceed HKD 20 billion each. In terms of net purchase amount, SMIC received a net inflow of HKD 7.352 billion from southbound funds. In contrast, southbound funds primarily sold shares of major internet companies this week. Alibaba-W saw a net outflow of HKD 4.951 billion, while Tencent Holdings and Xiaomi Group-W experienced net outflows of HKD 2.023 billion and HKD 71 million, respectively. SMIC has now seen its southbound fund holdings increase for four consecutive weeks, with this week's shareholding rising by over 80 million shares. The company recently stated during an investor briefing that the current global shortage in production capacity is mainly due to strong and high-profit demand related to artificial intelligence (AI). This has led many foundries and IDM manufacturers to shift their capacity to AI or high-bandwidth memory (HBM) related areas. In contrast, China still maintains relatively ample semiconductor production capacity, prompting many overseas customers to transfer their orders to mainland China for manufacturing. Regarding future industry trends, SMIC indicated that it expects a significant return of production demand for products such as mobile phones, computers, IoT devices, and networking equipment over at least the next two years. Given the rapid pace and large scale of local capacity construction in China, the country is well-positioned to handle large-scale returning orders. In terms of market performance, the actively traded stocks showed mixed results this week. Lenovo Group led the gains, rising by 52.38% over the week, followed by Hua Hong Semiconductor, which increased by 23.98%. Dongyue Group, Pop Mart, and Sunny Optical Technology also saw gains exceeding 10%. On the other hand, Montage Technology recorded the largest decline, falling by 15.22% over the week. Meituan-W and Jin Hui Holdings declined by 9.71% and 9.63%, respectively. Since the beginning of May, Lenovo Group has accumulated a gain of 105.48%. In terms of news, Lenovo Group signed an agreement with the Tianjin Municipal Government to build a new generation of AI infrastructure. According to the agreement, Lenovo will invest in the construction of a research, development, and manufacturing center for new-generation AI computing products within the Lenovo (Tianjin) Smart Innovation Service Industrial Park, aiming to secure a leading position in industrial competition. The new production line is scheduled for mass production in the autumn of 2027. Additionally, Lenovo Group recently released its financial results for the fiscal year ending March 31, 2026. The company's revenue reached a new high, exceeding USD 80 billion to reach USD 83.075 billion (approximately RMB 5.74826 trillion), representing a year-on-year increase of 20%. Lenovo Group stated that during this fiscal year, the momentum of artificial intelligence further accelerated, with AI-related revenue growing by 105% year-on-year, accounting for 33% of the group's total revenue. Among this, both AI devices and AI services recorded triple-digit year-on-year revenue growth, while AI server revenue also achieved high double-digit year-on-year growth. Fifteen stocks saw their southbound fund holdings increase by over 10% week-on-week. Jingwei Tiandi led the list with a week-on-week increase of 1,767.33%, followed by Huaqin Technology, Pegasus Biopharmaceutical-B, and Chuangxin Industrial, with week-on-week increases of 758.23%, 146.39%, and 42%, respectively. In terms of the proportion of Hong Kong Stock Connect holdings relative to the total Hong Kong shares, among the stocks with a week-on-week increase of over 10% in Stock Connect holdings, Jingwei Tiandi, Zhaowei Machinery & Electronics, and Guanghe Technology had the highest latest holding ratios, reaching 37.43%, 19.95%, and 19.32%, respectively. Jingwei Tiandi became a Stock Connect target on May 6 this year. On May 21, its stock price plummeted sharply, closing down by 83.16%. Southbound funds have continued to increase their holdings recently, with the latest shareholding reaching nearly 1.5 billion shares, accounting for 37.43% of the total Hong Kong shares. The company is associated with the AI computing concept. According to an announcement after the market closed on May 15, leveraging its existing technical capabilities in ICT communication services, wireless network optimization, and the FoPay payment platform, the company has decided to initiate an AI strategy upgrade, extending its business into the computing power services sector within AI infrastructure.