Meituan surges 12%, Alibaba rises over 6%! Hong Kong internet ETF Huabao (513770) fund manager hot takes: After short-term sharp decline, there may be rapid recovery in the market

Author: Hong Kong Stock Internet ETF Huabao (513770) Fund Manager Feng Chencheng

On March 25th during trading, the State Administration for Market Regulation reposted an article from the Economic Daily titled “The Takeout War Should End.” The article states that timely regulation to stop the takeout competition is actually to maintain normal economic operation, prevent vicious competition from disrupting the economic recovery pace, and allow companies and workers to have stable lives and incomes. Previously, Beijing had interviewed 12 platform companies to address “involution” competition.

In response to this major news, leading tech stocks surged. Meituan-W rose over 12% at one point, Alibaba-W increased over 6% intraday. The Hong Kong Stock Internet ETF Huabao (513770), a core tool for Hong Kong AI stocks, briefly rose more than 3% in the market.

Feng Chencheng, fund manager of the Hong Kong Stock Internet ETF Huabao (513770), said that from mid-February to early March, the Hong Kong stock market faced temporary liquidity pressure. Recently, as the duration of the US-Iran conflict exceeded expectations, market concerns about the long-term tension in the Middle East have risen significantly, leading to a decline in global risk appetite. Rising oil prices have disturbed the Fed’s previous rate cut pace, and a stronger US dollar index has affected capital flows to emerging markets and Asian equities. Additionally, after the Shanghai Composite Index fell below 4,000 points, it accelerated downward, dragging the Hong Kong market down for three consecutive days. Feng Chencheng believes that in the short term, after a sharp decline, investors should watch for rapid recovery driven by fluctuations in risk appetite.

Looking ahead to the Hong Kong stock market, Feng Chencheng believes that the first quarter is the worst period for liquidity and performance. Currently, valuations of domestic internet giants are relatively low, with the PE-TTM of the Hong Kong internet sector falling back to about the 10th percentile of the past five years. The fundamentals of the Hong Kong internet sector may gradually improve starting from the second quarter. (Data source: Wind; as of March 24, 2026)

Feng Chencheng analyzed that from a fundamental perspective, some positive factors have already emerged:

On one hand, domestic AI-related innovation and product adoption are booming and continue to be important signals for future market trends. Major internet companies remain directly and comprehensively involved in AI themes (GPU, large models, cloud, Agent applications): the external cloud business has long-term potential. Alibaba has committed that within five years, “cloud + AI” external revenue will exceed $100 billion annually (about 690 billion yuan). Management has indicated that as scale expands, profit margins are expected to improve. Recently, large model vendors and cloud service providers collectively raised prices, indicating significant upward elasticity in computing power and cloud service prices amid changing demand. Meanwhile, AI is expected to enhance the sustainability of Tencent’s gaming business.

On the other hand, the market share competition in the instant retail sector, led by Alibaba, has not shown clear positive feedback. The ongoing takeout war continues to squeeze some market share from competitors, but strategically, it offers limited overall benefits. Regulatory voices also echo the decline of such involutionary competition. The reduction of subsidies helps reduce losses in instant retail, supporting a rebound in overall corporate profits.

Special reminder: Recent market volatility may be significant, and short-term gains or losses do not predict future performance. Investors should invest rationally based on their own financial situation and risk tolerance, paying close attention to position sizes and risk management.

Risk warning: The Hong Kong Stock Internet ETF Huabao passively tracks the CSI Hong Kong Stock Connect Internet Index. The base date of the index is December 30, 2016, published on January 11, 2021. The index components are adjusted periodically according to the index rules. Its backtested performance does not predict future results. The index components shown in this article are for display only; individual stock descriptions are not investment advice and do not represent holdings or trading activity of any fund managed by the manager. The risk level of this fund, assessed by the fund manager, is R4—moderate to high risk, suitable for aggressive (C4) and above investors. Suitability matching opinions are subject to the sales institution. Any information 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 are responsible for their own investment decisions. The views, analysis, and forecasts in this article do not constitute investment advice and the manager is not responsible for any direct or indirect losses resulting from the use of this content. Fund investments carry risks; past performance does not guarantee future results. The performance of other funds managed by the fund manager does not guarantee the performance of this fund. Investors should exercise caution. ETF-related fee disclosures: When subscribing or redeeming fund shares, the agent may charge a commission of up to 0.5%. Trading fees on the exchange are based on the actual charges of the securities firm; no sales service fee is charged.