Shares of NetEase Inc (HKEX: 09999) surged more than 5% during the morning trading session. At the time of writing, the stock was up 3.01% to HK$205.2, with a turnover of HK$498 million.

Key Developments Driving the Move

The Shanghai and Shenzhen stock exchanges have issued notices confirming that NetEase has been added to the list of eligible stocks for the Hong Kong Stock Connect program, effective June 30.

Analysts at Bank of America noted that NetEase announced its conversion to a dual primary listing status on June 26, also effective from June 30. This timing is significantly earlier than the bank's and the market's consensus expectation of the first quarter of 2027.

Analyst Commentary and Projections

A research report from Haitong International Securities stated that following its inclusion in the Stock Connect, NetEase's average daily trading volume is expected to increase to approximately RMB 3.4 billion, representing a rise of about 60% from current levels.

The report assumed an increase in Hong Kong stock liquidity of roughly 80% to 130%, with changes in US stock liquidity ranging from a decrease of 10% to an increase of 30%. Based on this, Haitong International anticipates relatively low pressure from fund rotation.

Additional Positive Catalysts

The positive sentiment is further supported by other catalysts, including the scheduled July 9 release of the PC version of the game "Echoes of the Forgotten Sea".