On July 2nd, leading Hong Kong-listed internet stocks experienced a long-awaited rally. At the time of writing, Meituan-W (03690) surged over 7%, while Kuaishou-W (01024) rose more than 6%. Alibaba-W (09988), Xiaomi Group, and Bilibili all gained over 4%, with TENCENT (00700) climbing more than 3%. Additionally, AI application concept stocks such as Meitu, Mobvista, and Kingdee International were among the top gainers.

The HuaBao Hong Kong Internet ETF (513770), which heavily invests in these internet leaders, saw its on-exchange price rise by 4.35%. The index it tracks, the CSI Hong Kong Stock Connect Internet Index, has fallen over 48% since its adjustment on October 3, 2025. Its current trailing P/E ratio stands at just 17.69 times, positioned at an absolute bottom in the 0.7th percentile over the past decade.

Kling AI Funding News

Reports indicate that Kuaishou's AI subsidiary, Kling AI, is nearing the completion of a $30 billion funding round, with TENCENT participating as an investor. Post-funding, Kling AI's valuation is expected to reach $180 billion. Sources close to the transaction stated that Kuaishou plans to initiate an IPO process for Kling AI in Hong Kong within the next 12 months. Proceeds from the listing are intended for expanding computing power and data centers, as well as attracting and retaining core technical talent. Financial reports show that in Q1 2026, Kling AI's revenue exceeded RMB 6.5 billion, representing year-over-year growth of over 300%. As of March 2026, its annualized revenue run rate (ARR) was nearly $5 billion.

Meituan's Open-Source Model Release

Furthermore, Meituan recently unveiled its next-generation foundational large language model, LongCat-2.0. This is a trillion-parameter model whose entire training and inference process was completed using domestic computing resources. At the end of April this year, Meituan released a preview version, LongCat-2.0-Preview, and anonymously integrated it into OpenRouter, the world's largest API routing platform for large models. Data from OpenRouter shows that as of the end of June, the total call volume for LongCat-2.0-Preview had ranked among the top three globally.

Outlook for Hong Kong Internet Leaders

Currently, leading Hong Kong internet companies are significant contributors to domestic computing capital expenditure. They possess social scenarios and closed-loop ecosystems suitable for deploying AI applications, embodying investment themes related to domestic computing power and AI adoption. They are poised to be a key direction for the diffusion of the domestic AI market trend. Catalyzed by both earnings recovery and low valuations, the overall trend may be poised for improvement.

Focus on Value Re-rating

Attention is on the potential value re-rating of Hong Kong internet leaders amidst the AI transformation. The HuaBao Hong Kong Internet ETF (513770) and its feeder funds (Class A 017125; Class C 017126) passively track the CSI Hong Kong Stock Connect Internet Index. Their top ten holdings aggregate tech giants like Alibaba-W and TENCENT alongside AI application companies across various sectors, showcasing significant leadership advantages. The ETF offers intraday T+0 trading with good liquidity.

Alternative Strategy for Lower Volatility

For those bullish on Hong Kong tech but seeking to reduce volatility, consider the market's first HuaBao Hong Kong Large Cap 30 ETF (520560). It employs a "tech + dividend" barbell strategy, holding both high-growth tech stocks like Alibaba and stable, high-dividend payers from sectors like banking and insurance, making it an ideal foundational tool for long-term Hong Kong market allocation.

Investment Considerations and Risk Disclosure

Investors are reminded that recent market volatility may be elevated, and short-term price movements do not indicate future performance. Investors must make rational investment decisions based on their own financial situation and risk tolerance, paying high attention to position sizing and risk management.

The HuaBao Hong Kong Internet ETF passively tracks the CSI Hong Kong Stock Connect Internet Index. The index's base date is December 30, 2016, and it was published on January 11, 2021. Its constituent stocks are adjusted according to the index methodology. Constituent stocks mentioned are for illustrative purposes only; individual stock descriptions are not investment advice and do not represent the holdings or trading动向 of the fund manager. The fund manager assesses this fund's risk level as R4 (Medium-High Risk), suitable for aggressive (C4) and above investors. Any information appearing herein is for reference only. Investors are solely responsible for their independent investment decisions. The views, analyses, and forecasts herein do not constitute investment advice of any form, and no liability is accepted 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 this fund's performance. Past performance of a fund is not indicative of its future results. Fund investment carries risks; invest with caution.