Hong Kong stocks opened higher and continued to climb on July 27, with major internet companies showing strong momentum. As of the latest update, Xiaomi Group-W (01810.HK) led the gains with a surge of over 8%, followed by Meituan-W (03690.HK) rising more than 4%. Bilibili-W (09626.HK) and Kuaishou-W (01024.HK) each advanced over 2%, while Tencent Holdings (00700.HK) and Alibaba Group Holding Ltd (09988.HK) also posted gains of more than 1%.

The Hong Kong Stock Connect Internet ETF, which heavily weights these internet leaders, saw its intraday price climb over 3% before settling at a 2.83% gain. Recent capital flows show strong investor interest, with data from the Shanghai Stock Exchange indicating that the ETF received net capital inflows on four of the five trading days last week, totaling over 291 million yuan.

On the news front, Xiaomi Group-W (01810.HK) announced that its Xiaomi Pengcheng brand will hold a technology launch event on July 30 at 7 PM, officially introducing the "Xiaomi Kunlun Technology Architecture" and two new intelligent variable large-space SUVs: the Xiaomi Pengcheng N90 Max and the Xiaomi Pengcheng N70 Max. Additionally, Lei Jun confirmed that the N90 Max test vehicles have arrived at dealerships and are available for customer experience.

Goldman Sachs' latest research report indicates that Xiaomi Group-W (01810.HK), as the world's third-largest smartphone brand, a leading consumer AIoT and new energy vehicle platform, is still in the early stages of ecosystem expansion under its "Human x Car x Home" strategy. The company's strong balance sheet, ecosystem integration capabilities, scale effects, and cost advantages from deep supply chain participation are expected to continuously strengthen its competitiveness, potentially building the world's largest consumer-grade physical intelligent ecosystem.

CITIC Securities noted that since the beginning of 2026, the AI industry chain has shown a significant K-shaped divergence between hardware and non-hardware segments, with internet stocks notably underperforming. Starting in July, this divergence has begun to converge, driven by two major rebalancing themes: structurally, overly crowded hardware positions are shifting to cloud and application sectors as expectations for hyperscaler model commercialization improve; and in terms of capital flows, foreign investors have been underweighting Chinese stocks and internet firms, while the sector's funding levels remain low, with southbound capital maintaining a steady inflow.

Furthermore, both fundamentals and valuations are expected to see a dual uplift. On the earnings front, pessimistic expectations have been fully priced in, with VA consensus estimates showing that the sector's non-GAAP net profit growth will bottom out in the second quarter of 2026, followed by a profit inflection point in the second half of the year. The gradual recovery of EPS estimates provides a safety margin and positive catalysts. On the valuation side, Kimi K3 is leading a new iteration cycle of domestic models, and with the WAIC catalyst, overseas capital may reassess Chinese AI assets. As China's AI narrative becomes clearer, the outlook for Hong Kong internet stocks' recovery and convergence is bullish.

Investors are watching the value reassessment of Hong Kong internet leaders amid the AI transformation. The Hong Kong Stock Connect Internet ETF (ticker: 513770) and its linked funds (Class A: 017125; Class C: 017126) passively track the CSI Hong Kong Stock Connect Internet Index, with its top ten heavyweights including tech giants like Alibaba Group Holding Ltd (09988.HK) and Tencent Holdings (00700.HK), as well as AI application companies across various sectors. The ETF offers significant leader advantages and supports intraday T+0 trading with strong liquidity.

For those bullish on Hong Kong tech stocks but seeking to reduce volatility, the market's first product—the Hong Kong Large-Cap 30 ETF (ticker: 520560)—offers a built-in "tech + dividend" barbell strategy. Its heavy holdings include high-beta tech stocks like Alibaba Group Holding Ltd (09988.HK), as well as stable, high-dividend stocks in banking and insurance, making it an ideal core tool for long-term Hong Kong stock allocation.

Reminder: Recent market volatility may be significant, and short-term gains or losses do not predict future performance. Investors should make rational investment decisions based on their own financial situation and risk tolerance, with careful attention to position and risk management.

Data sources: Shanghai and Shenzhen stock exchanges, etc.

ETF fee description: When investors subscribe or redeem fund shares, the subscription and redemption agency may charge a commission of up to 0.5%, which includes fees charged by the stock exchange and registration institution. Linked fund fee description: For the Huabao CSI Hong Kong Stock Connect Internet ETF Feeder Fund (Class A), the subscription fee (front-end) is 1,000 yuan per transaction for subscription amounts over 2 million yuan, 0.6% for amounts between 1 million yuan (inclusive) and 2 million yuan, and 1% for amounts under 1 million yuan. The redemption fee is 1.5% for holdings less than 7 days and 0% for holdings of 7 days or more. No sales service fee is charged for Class A. For the Huabao CSI Hong Kong Stock Connect Internet ETF Feeder Fund (Class C), no subscription fee is charged, the redemption fee is 1.5% for holdings less than 7 days and 0% for holdings of 7 days or more, and the sales service fee is 0.3%.

Risk Disclaimer: The Hong Kong Stock Connect Internet ETF and its linked funds passively track the CSI Hong Kong Stock Connect Internet Index, which has a base date of December 30, 2016, and was launched on January 11, 2021. The index's constituent stocks are adjusted according to the index compilation rules. The index constituent stocks mentioned in this article are for display purposes only and do not constitute investment advice in any form, nor do they represent the holdings or trading activities of any fund managed by the fund manager. The fund manager assesses the risk level of this fund 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, forecasts, charts, indicators, theories, or any form of expression) is for reference only. Investors must be responsible for their own investment decisions. Additionally, any views, analyses, or forecasts in this article do not constitute investment advice to readers and should not be held liable for any direct or indirect losses arising from the use of this content. The performance of other funds managed by the fund manager does not guarantee the performance of this fund. Past performance does not represent future returns. Fund investment carries risks, and investors should be cautious.