Hong Kong AI Stocks Rebound After Four-Day Slump: Xiaomi Jumps 2% on 17 Ultra Launch Rumors, Nearly $600M Inflows Signal Bottom Fishing

Deep News12-12 10:33

On December 12, Hong Kong's AI sector showed signs of recovery, with most major tech stocks gaining. XIAOMI-W led the rally with over 2% growth amid rumors of its 17 Ultra model launch this month. MEITUAN-W rose more than 1%, followed by BABA-W, KUAISHOU-W, and TENCENT. The Hong Kong Internet ETF (513770) opened higher, currently up 0.93%, ending its four-day losing streak.

Analysts suggest the Hong Kong internet sector's downside may now be limited, presenting a potential entry point with three key drivers:

1. Valuation Gap: Since October, Hong Kong's AI stocks have corrected, with the Hang Seng Tech Index dropping 13.68% by December 10—underperforming mainland indices. The Hong Kong Internet Connect Index, tracking major internet firms, fell 16.7%, now trading at just 25x P/E—near 10-year lows at the 27.73 percentile, reinforcing its "global valuation bargain" status.

2. Liquidity Boost: Southbound inflows exceeded HK$1.3 trillion in 2025, while anticipated Fed rate cuts are accelerating global capital rotation back to Hong Kong.

3. AI Catalysts: Alibaba's breakthroughs continue, with Meta adopting its Qwen model for AI optimization. Alibaba Cloud also launched its AgentRun AI infrastructure platform. Qwen's app surpassed 10 million downloads in its first week of public testing, becoming the fastest-growing AI application.

Guosen Securities notes that since November's correction, valuations of TENCENT, MEITUAN, and BABA have returned to attractive levels, recommending increased allocation to Hong Kong internet stocks. Data shows HK$584 million flowed into the Hong Kong Internet ETF (513770) over six days, including HK$352 million yesterday.

The Hong Kong Internet ETF (513770) and its feeder funds (A-share 017125; C-share 017126) track the CSI Hong Kong Internet Index, heavily weighted in BABA-W (73% top 10 holdings combining AI cloud and application leaders). With over HK$10 billion AUM and average daily turnover exceeding HK$600 million, it offers T+0 trading without QDII quota constraints.

For balanced exposure, the Hong Kong Large-Cap 30 ETF (520560) employs a "tech + dividend" barbell strategy, blending high-growth names like BABA and TENCENT with stable dividend payers like China Construction Bank.

Warning: Recent volatility may persist. Investors should assess risk tolerance carefully. Past performance (CSI Hong Kong Internet Index: +109.31% in 2020, -36.61% in 2021, -23.01% in 2022, -24.74% in 2023, +23.04% in 2024) doesn't guarantee future results.

Risk Disclosure: The Hong Kong Internet ETF tracks an index launched on 2021/1/11 (base date 2016/12/30). Constituent changes occur per index rules. Stock mentions aren't recommendations. The fund carries R4 (higher risk) suitability for aggressive (C4+) investors.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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