Hong Kong's three major stock indexes opened higher on August 5, with internet leaders collectively strengthening. Alibaba-W (09988.HK) rose over 2% for its fourth consecutive day of gains, while Tencent Holdings (00700.HK) climbed 1.8%, accumulating a rebound of more than 15% since July. Other stocks like Meituan-W, Kuaishou-W, Bilibili-W, and Xiaomi Group-W also followed suit. The Huabao Hong Kong Internet ETF (513770), which heavily weights these internet leaders, saw its intraday price rise 1.29%. Since July, the Hong Kong internet sector has begun an upward repair, with the underlying index of the Huabao Hong Kong Internet ETF (513770), the CSI Hong Kong Stock Connect Internet Index, surging 18.81% in a single month, leading major global tech indices.
On the news front, Goldman Sachs has significantly raised its revenue expectations for China's large language models (LLMs), lifting the combined annual recurring revenue (ARR) forecast for Chinese LLM companies by the end of 2026 from $10 billion to $13 billion. The firm also predicts this figure will climb to $125 billion by 2030, representing a 25-fold increase over five years. Data from OpenRouter shows that Chinese LLMs have ranked among the top five in terms of call volume for 14 consecutive weeks. Analysts believe that China's LLM sector is transitioning from a "cost-performance narrative" to a "revenue realization narrative."
Institutional analysts suggest that leading domestic LLM companies currently hold significant differentiation advantages and strong monetization capabilities in overseas markets. As domestic LLM capabilities approach the first tier of global mainstream models, domestic AI applications and agents are poised to enter a phase of flourishing development, with the inflection point for commercial value realization now at hand. Institutions assess that the first half of 2026 is becoming a critical turning point for the AI application industry, with LLM commercialization officially moving from the technical validation phase to the revenue realization phase. A positive cycle of "improved model capabilities, increased token usage, and enterprise payment conversion" is gradually taking shape.
Against this backdrop, platform-based internet leaders and application vendors with advantages in scenario positioning, data accumulation barriers, and core technological capabilities will face a dual opportunity of accelerating earnings releases and valuation system restructuring. The AI application sector is shifting from thematic investment to a fundamentally driven market trend. It is noteworthy that as of the end of July, the price-to-earnings ratio (PE TTM) of the Hong Kong Stock Connect Internet Index stood at 20.47 times, still within the historically low range of the 8.94th percentile over the past five years. Compared to US, South Korean, and A-share tech stocks, it remains a "valuation trough."
The focus is on the value reassessment of Hong Kong internet leaders amid the AI transformation. The Huabao Hong Kong Internet ETF (513770) and its linked funds (Class A: 017125; Class C: 017126) passively track the CSI Hong Kong Stock Connect Internet Index. Its top ten heavyweight stocks include tech giants like Alibaba-W and Tencent Holdings, along with various AI application companies, showcasing significant leadership advantages. The ETF supports intraday T+0 trading with good liquidity. For those who are bullish on Hong Kong tech stocks but wish to reduce volatility, the market's first Hong Kong Large Cap 30 ETF Huabao (520560) is also worth considering. It employs a "tech + dividends" barbell strategy, with heavyweight holdings including high-elasticity tech stocks like Alibaba as well as stable, high-dividend stocks from sectors like banking and insurance, making it an ideal long-term allocation tool for Hong Kong markets.
Reminder: Recent market volatility may be significant, and short-term gains or losses do not predict future performance. Investors must rationally invest based on their own capital situation and risk tolerance, paying close attention to position and risk management. Data sources: Shanghai and Shenzhen stock exchanges, etc. For ETF fee details: When investors subscribe or redeem fund shares, the subscription and redemption agency may charge a commission of up to 0.5%, which includes fees charged by the stock exchange, registration institution, and others. For linked fund fee details: The subscription fee (front-end) for Huabao CSI Hong Kong Stock Connect Internet ETF Feeder (Class A) is 1,000 yuan per transaction for subscription amounts over 2 million yuan, 0.6% for amounts between 1 million yuan (inclusive) and 2 million yuan, and 1% for amounts under 1 million yuan. The redemption fee is 1.5% for holdings less than 7 days and 0% for holdings 7 days or more, with no sales service fee. For Huabao CSI Hong Kong Stock Connect Internet ETF Feeder (Class C), no subscription fee is charged, the redemption fee is 1.5% for holdings less than 7 days and 0% for holdings 7 days or more, with a sales service fee of 0.3%. Risk disclaimer: The Huabao Hong Kong Internet ETF (513770) and its linked funds passively track the CSI Hong Kong Stock Connect Internet Index. The index base date is 2016.12.30, and it was published on 2021.1.11. The returns of the CSI Hong Kong Stock Connect Internet Index over the past five complete years were: 2025, 27.02%; 2024, 23.04%; 2023, -24.74%; 2022, -23.01%; 2021, -36.61%. The volatilities over the past five complete years were: 2025, 33.60%; 2024, 43.49%; 2023, 32.09%; 2022, 49.01%; 2021, 38.72%. The index's constituent stocks are adjusted according to the index compilation rules, and its back-tested historical performance does not indicate future index performance. The index constituent stocks shown in this article are for display purposes only. Descriptions of individual stocks do not constitute any form of investment advice, nor do they represent the holdings or trading strategies of any fund under the fund manager's management. The fund manager assesses the risk level of this fund as R4-moderate-to-high risk, suitable for aggressive (C4) and above investors. Any information appearing in this article (including but not limited to individual stocks, comments, forecasts, charts, indicators, theories, any form of expression, etc.) is for reference only. Investors must be responsible for any investment decisions made on their own. In addition, any views, analyses, and forecasts in this article do not constitute any form of investment advice to readers and shall not be held liable for any direct or indirect losses resulting from the use of the content herein. The performance of other funds managed by the fund manager does not constitute a guarantee of the fund's performance. The fund's past performance does not represent its future performance. Fund investment carries risks, and fund investment must be approached with caution.
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