Since the start of the year, southbound capital has recorded six consecutive weeks of net purchases, while cross-border ETFs have also seen substantial net subscriptions, leading to a significant increase in scale. Wind data shows that during the six trading weeks this year, southbound capital has continued net buying, with a cumulative net purchase of 136.151 billion yuan as of February 13. At the same time, capital has flowed into the Hong Kong stock market through cross-border ETFs. As of February 13, cross-border ETFs have seen a net inflow of 31.387 billion yuan in February alone, nearly matching the total net inflow for January, bringing the year-to-date net inflow to over 60 billion yuan. The Hang Seng Tech ETF and the Hang Seng Internet ETF have been the primary targets of this capital inflow. Driven by sustained net subscriptions, the scale of cross-border ETFs briefly surpassed the one trillion yuan mark on February 11 before retreating slightly below that level due to market adjustments, settling at 990.547 billion yuan as of February 13. However, based on the change in fund units, the increase in net subscriptions has pushed the total units of cross-border ETFs to 999.728 billion, just a step away from the trillion mark. With this substantial capital inflow, the question arises: has the Hong Kong stock market completed its adjustment?

Hong Kong-themed ETFs have demonstrated strong capital attraction. Among cross-border ETFs, those focused on Hong Kong stocks have seen significant buying interest this year. Using an estimation method that includes indices tracking "Hong Kong stocks" or "Hang Seng," Hong Kong-themed ETFs have attracted net inflows of over 120 billion yuan year-to-date, with more than 60 billion yuan flowing in during February alone, exceeding the net inflows into cross-border ETFs during the same period. The Hang Seng Tech ETF has attracted the most capital. Data indicates that ETFs tracking the Hang Seng Tech Index saw a combined net inflow of 17.262 billion yuan in February, accounting for over half of the total inflows into cross-border ETFs. Meanwhile, the Hang Seng Tech Index has declined by more than 6% cumulatively in February, suggesting that bargain hunting may be the motive behind the recent capital inflow.

Looking at individual products, the cross-border ETFs with the highest net inflows since February are predominantly Hong Kong-themed. As of now, the Huatai-PineBridge Hang Seng Tech ETF has seen the largest net inflow, with 5.493 billion yuan in February. Sustained net subscriptions have pushed the fund's unit count to a new record, surpassing the 70 billion unit mark to reach 70.999 billion units; its fund size has also hit a new high of 48.805 billion yuan. The Hang Seng Tech ETFs managed by E Fund Management and China Asset Management also saw net inflows exceeding 3 billion yuan each in February, with both ETFs reaching new highs in total fund units. The E Fund Hang Seng Tech ETF's size broke through the 30 billion yuan mark, reaching a new high of 30.358 billion yuan; the leading ChinaAMC Hang Seng Tech ETF reported a latest size of 51.992 billion yuan.

Hong Kong internet-themed ETFs have also attracted significant subscriptions. Among them, the only ETF tracking the China Internet 50 Index—the E Fund China Overseas Internet ETF—saw a net inflow of 4.284 billion yuan this month. ETFs tracking the Hang Seng Internet & Technology Sector and the Hong Kong Stock Connect Internet Index saw net inflows of 3.302 billion yuan and 1.899 billion yuan, respectively. Although the three indices have some overlap in their constituent stocks, the concentration of top holdings varies. The China Internet 50 Index has a higher concentration, with the combined weight of its top ten holdings exceeding 90%. This has led to a deeper adjustment in the China Internet 50 Index since February, accompanied by stronger bargain-hunting activity. In addition to the aforementioned E Fund China Overseas Internet ETF, the ChinaAMC Hang Seng Internet & Technology ETF saw a net inflow of over 3 billion yuan this month, while the E Fund Hong Kong Stock Connect Internet ETF attracted over 1 billion yuan in net inflows.

Against the backdrop of continuous capital inflows, the Hong Kong market has underperformed since the beginning of the year. In terms of year-to-date performance, the Hang Seng Tech Index has fallen by 2.82%, lagging behind both the CSI 300 Index and the Hang Seng Index. As the market adjusts, the earnings performance of Hong Kong's internet and technology sectors has also shown signs of weakness. Given the latest market developments and sustained capital inflows, does this indicate that the Hong Kong stock market has completed its adjustment?

According to analysis by CICC, the market's future trajectory depends on changes in three dimensions: the credit cycle, which determines the index's potential upside; industry trends, which dictate the strength of sectoral performance; and liquidity, which can amplify volatility. Since the main supports for Hong Kong stocks and valuation elasticity are the technology (especially AI) and new consumption sectors, CICC suggests that if leading Hong Kong tech companies can identify investment approaches that align with their capabilities and development pace, the potential for upward revision in Hong Kong stocks may be greater and more certain.

GF Securities noted that while the Hang Seng Index has an 82% probability of rising in the three trading days before the Lunar New Year, there is no significant calendar effect after the holiday, with the probability of gains ranging between 40% and 60%. Although the typical window from post-holiday to the Two Sessions is not naturally favorable for Hong Kong stocks, this time might be different. This is primarily because the recent pricing logic of Hong Kong stocks is changing, with a strengthening correlation to A-shares, suggesting the possibility of passive follow-up gains. Looking ahead, GF Securities mentioned that as the Hang Seng Tech Index recently broke through its annual moving average, it reflects a significant release of sentiment-driven pressure. If positive catalysts emerge, Hong Kong stocks could experience a共振 of sentiment recovery and capital回流. They recommend分批布局 at sentiment lows in sectors benefiting from the AI industry trend, such as internet stocks. However, they also emphasized the need to closely monitor the peak in restricted share解禁 from late February to early March, involving nearly 100 billion yuan. "If the market has already partially digested selling pressure through adjustments before the解禁, the actual event could form a阶段性底部. If Hong Kong stocks continue to adjust, the解禁 window may present a good布局 opportunity," GF Securities stated.