Tencent, Alibaba, Xiaomi, and Meituan surge together! After two weeks of extreme pessimism, Hong Kong internet stocks are now experiencing a recovery.

April 8, with positive news from the ceasefire around the perimeter, emerging market technology assets collectively rebounded. Hong Kong-listed internet stocks, which had fallen more sharply, also saw a repair after reaching extreme pessimism. Tencent, Alibaba, and Xiaomi’s share prices all rose by more than 3%. Meituan rose by more than 6%. The Hang Seng Internet ETF Huaxia (513330.SH), which covers the above-mentioned heavyweight stocks, rose by more than 3% as well.

A strategy team at Huatai Securities said: The latest reading of the pre-holiday sentiment index for Hong Kong stocks is 28.6. After it first touched the panic zone on March 26, it has still stayed in the panic zone. From 2024 to date, this sentiment index has triggered panic seven times. The T+14/T+21 win rates and the average returns and losses are 86%/100% and 4.0%/3.8%, respectively.

A strategy team at Industrial Securities pointed out: After experiencing sustained adjustments in the early period, the Hong Kong internet sector has already priced in pessimistic expectations fairly fully, and pressure from further downward revisions to earnings is easing. As expectations for the mid-term Iran-U.S. negotiations gradually become clearer, if geopolitical conditions show marginal improvement, it could provide an opportunity for the market’s sentiment to recover. Overall, although short-term volatility is unavoidable, the Hong Kong stock market has gradually developed resilience in terms of valuation and earnings, indicating it already has strength in the bottom-region area.

For individual investors who do not have trading permissions for Hong Kong stocks or the Hong Kong Stock Connect, you can consider the Huaxia Hang Seng Internet ETF (513330.SH). The underlying index constituents include a basket of internet leaders, covering Alibaba, Tencent Holdings, Baidu Group, Xiaomi Group, Meituan, and more, with a combined weighting of around 70%. The leading companies are relatively concentrated.

Compared with Hong Kong Stock Connect internet ETFs, the Huaxia Hang Seng Internet ETF’s features are that it covers Hong Kong internet giants more comprehensively, including Baidu Group, JD Group, NetEase, and GDS Holdings, among others, that have not yet been included in the scope of Hong Kong Stock Connect. It supports T+0 intraday round trips. Fund investors can also consider dollar-cost averaging into the Huaxia Hang Seng Internet ETF Link C (013172.OF) in batches when prices are low.

Daily Economic News

(Editor: Zhang Xiaobo)

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