Hong Kong stocks rebounded broadly, with Alibaba-W leading the gain at nearly 5%. Kuaishou-W and Bilibili-W each rose over 4%, while Meituan-W climbed over 3%. Tencent and Xiaomi Group-W increased more than 2%.
The Hong Kong Internet ETF (513770), heavily invested in internet leaders, saw its on-market price rise by 2.25%, with a trading volume exceeding 160 million yuan within the first half hour of trading, indicating strong liquidity.
On the news front, the economic and trade leaders of China and the United States held a video call. According to media reports, both sides engaged in sincere, in-depth, and constructive discussions on key issues in bilateral economic and trade relations, agreeing to hold a new round of China-US economic and trade consultations as soon as possible. Market tensions eased from the previously softened stance of Trump to the recent communication between trade leaders. Additionally, Federal Reserve Chairman Jerome Powell hinted at another possible 25 basis point rate cut during the upcoming monetary policy meeting at the end of the month.
Cathay Securities noted that although recent fluctuations in Hong Kong stocks have increased, short-term disturbances do not alter the mid-term trend. With the industrial cycle heading upward and incremental capital entering the market, a bull market for Hong Kong stocks is expected to continue in the fourth quarter, with technology stocks remaining the main focus.
According to China Merchants Securities, the outlook for the fourth quarter appears to be a period of initial decline followed by a rebound. In the absence of new positive developments, Hong Kong stocks may continue to experience oscillations. However, potential marginal positive factors are expected to accumulate, driving Hong Kong stocks upward: the booming development of the Chinese tech industry represented by AI, which continues to achieve innovative breakthroughs; potential resolution of tariffs between the US and China; critical meetings discussing the “14th Five-Year Plan,” likely improving expectations for new industrial policies and boosting risk appetite; and continuous reinforcement of expectations for Fed rate cuts, benefiting foreign investments in Hong Kong stocks.
The Hong Kong Internet ETF (513770) and its associated funds (Class A 017125; Class C 017126) track the CSI Hong Kong Internet Index. The top three weighted stocks are Alibaba-W, Tencent, and Xiaomi Group-W, with weights of 18.92%, 15.60%, and 11.54%, respectively. The top ten holdings encompass leading companies from various internet sectors, collectively accounting for over 73%, showcasing significant leadership advantages and establishing it as a core investment target for AI in Hong Kong.
This year, supported by the AI concept, the internet sector has shown noticeably higher elasticity. The CSI Hong Kong Internet Index has significantly outperformed the Hang Seng Tech Index.
Moreover, the internet sector boasts lower valuations, with the latest Price-to-Earnings ratio (PE) of the CSI Hong Kong Internet Index at only 26.69 times, situated at a median level within the past decade (32.79%). This not only significantly outperforms US and A-share tech stocks but is also lower than the historical median PE (38.31%) of the Hang Seng Tech Index during the same period.
The latest scale of the Hong Kong Internet ETF (513770) has surpassed 11 billion yuan, reaching a historical high; the average daily trading volume this year exceeded 600 million yuan and supports T+0 intraday trading with no restrictions from QDII limits, indicating excellent liquidity! Caution: Recent market volatility may be considerable, and short-term fluctuations do not forecast future performance. Investors are advised to make rational investments based on their financial situation and risk tolerance, with high attention to position and risk management.
Data Source: Shanghai and Shenzhen stock exchanges, etc. The past five full-year performance of the CSI Hong Kong Internet Index showed gains or losses of: 109.31% in 2020; -36.61% in 2021; -23.01% in 2022; -24.74% in 2023; and 23.04% in 2024. The composition of the index components is adjusted timely according to the index compilation rules; past performance does not indicate future performance.
Risk Warning: The Hong Kong Internet ETF passively tracks the CSI Hong Kong Internet Index, with a base date of December 30, 2016, and was released on January 11, 2021. The constituents of the index are adjusted per its compilation rules. The individual stock descriptions herein are for demonstration only and do not constitute any investment advice nor represent the positions and trading directions of any funds managed by the fund manager. The fund manager assesses this fund's risk level as R4 - medium to high risk, suitable for aggressive (C4) investors and above. Any information appearing in this article (including but not limited to individual stocks, comments, forecasts, charts, indicators, theories, and any form of expression) is for reference only; investors must take responsibility for their investment decisions. Furthermore, any opinions, analyses, or predictions in this article do not constitute any form of investment advice to the reader, nor does it bear any liability for direct or indirect losses caused by the use of this content. The performances of other funds managed by the fund manager do not constitute a guarantee of the fund's performance, and past performance of the fund does not represent future performance; investing in funds involves risk, and investors should proceed with caution.
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