On September 1st, Hong Kong AI stocks finally showed signs of momentum initiation, with the core Hong Kong AI investment tool - Hong Kong Internet ETF (513770) gapping higher at market open, with intraday prices rising over 3% and closing up 1.7%, returning above all moving averages.

Heavyweight leader BABA-W surged over 18% post-earnings, Xiaomi Corporation-W rose over 2%, while Tencent Holdings and Bilibili-W gained over 1%.

On Friday evening (August 29th), Alibaba disclosed better-than-expected financial results, with Alibaba Cloud business revenue growing 26% to a three-year high, and reaffirming its commitment to invest RMB 380 billion in AI capital expenditure over the next three years. Analysts believe Alibaba has achieved a positive cycle where increased AI investment generates increased AI revenue.

Alibaba ignited the Hong Kong AI rally. Notably, as A-share artificial intelligence stocks have been surging recently, capital has begun seeking high value-proposition directions, betting on Hong Kong AI catch-up momentum. Shanghai Stock Exchange data shows that Hong Kong Internet ETF (513770) has received continuous net inflows of RMB 14.79 billion over the past 10 days. The latest fund size has exceeded RMB 90 billion, reaching a historical high.

On one hand, since June's market rally, Hong Kong tech has significantly underperformed A-share tech, offering superior valuation value proposition. As of last Friday (August 29th), the Hang Seng Index P/E ratio was only 21.23x, at the 19.23% percentile level of the past 5 years; the Hong Kong Internet ETF (513770)'s tracked CSI Hong Kong Connect Internet Index P/E percentile was only 15.08% of the past 5 years.

According to historical data analysis, from 60-day rolling return differentials, there has historically been a clear alternating rotation relationship between ChiNext and Hang Seng Tech. When ChiNext's gains lead Hang Seng Tech by 20 percentage points, it often signals that Hang Seng Tech relative returns will experience catch-up (exception was the 2021 institutional crowding scenario, where fundamental differences caused by new energy sectors led to return differentials exceeding 30 percentage points). Analysis suggests that Hang Seng Tech, which shares similar "institutional heavyweight" and "anti-barbell strategy" characteristics, may welcome catch-up momentum as ChiNext approaches new highs with significant outperformance.

On the other hand, Hong Kong tech stocks are returning to AI narrative, and as AI spreads to application end, Hong Kong AI may become the main force in catch-up momentum.

The current AI tech rally, represented by CPO optical modules, has continued for an extended period. Some institutions believe that considering the similarities between "Internet+" and "AI+", AI applications may relay the computing power sector in the mid-to-late stages of this bull market. Analysts point to the possibility of AI momentum evolving from computing power toward cloud computing, AI hardware, and AI applications.

The Hong Kong market brings together a group of scarce internet leaders not available in A-shares. Internet companies like Alibaba and Tencent Holdings are not only AI computing power investors, but also AI large model technology developers, and important providers of mainstream AI applications. In the AI era, internet companies possess unique advantages and may become key directions for early involvement in AI application-end momentum.

Fund periodic reports show that as of the end of Q2, Hong Kong Internet ETF (513770) and its feeder funds (Class A 017125; Class C 017126) passively track the CSI Hong Kong Connect Internet Index. Through heavy positioning in Hong Kong internet leaders, the top 4 holdings are Xiaomi Corporation-W, Tencent Holdings, BABA-W, and Meituan-W, with combined weighting of 54.74%. The top 10 holdings account for over 72% combined weighting, demonstrating significant leading advantages and representing core Hong Kong AI targets.

Data shows that from year-to-date through end of August, the CSI Hong Kong Connect Internet Index's cumulative gains and maximum gains both significantly outperformed the Hang Seng Tech Index over the same period, benefiting from continuous AI theme development with outstanding upside elasticity.

During the same period, Hong Kong Internet ETF (513770) averaged RMB 598 million in daily trading volume year-to-date, supports intraday T+0 trading, is not subject to QDII quota limitations, offering good liquidity! Reminder: Recent market volatility may be significant, and short-term fluctuations do not predict future performance. Investors must invest rationally based on their financial situation and risk tolerance, paying high attention to position and risk management.

Data sources: Shanghai and Shenzhen Stock Exchanges, etc. Note: The CSI Hong Kong Connect Internet Index's annual returns for the past 5 complete years were: 2020: 109.31%; 2021: -36.61%; 2022: -23.01%; 2023: -24.74%; 2024: 23.04%. Index constituent stocks are adjusted timely according to index compilation rules, and historical backtested performance does not predict future index performance.

Risk Warning: Hong Kong Internet ETF passively tracks the CSI Hong Kong Connect Internet Index, which has a base date of December 30, 2016, and was published on January 11, 2021. Index constituent stocks are adjusted timely according to index compilation rules. Individual stocks mentioned in this article are for display purposes only, and individual stock descriptions do not constitute any form of investment advice, nor do they represent holding information or trading movements of any fund under management. The fund management company assesses this fund's risk level 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, predictions, charts, indicators, theories, any form of expression, etc.) is for reference only, and investors must be responsible for any autonomous investment decisions. Additionally, any views, analyses, and predictions in this article do not constitute investment advice in any form to readers, nor do they bear any responsibility for direct or indirect losses caused by using this article's content. The performance of other funds managed by the fund management company does not constitute a guarantee of fund performance. Past fund performance does not represent future performance. Fund investment carries risks and requires caution.

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