On May 21, Hong Kong stocks opened higher but turned lower, with all three major indices declining. Most leading internet companies retreated. At the time of writing, Alibaba-W fell over 3%, Tencent Holdings dropped nearly 2%, Xiaomi Group-W followed with a 0.4% decline, while Meituan-W bucked the trend, rising over 1%. The Hong Kong Internet ETF Huabao (513770), a core tool for accessing Hong Kong's internet sector, saw its price drop 1.99% intraday, reaching a new low since the current pullback began.
Currently, the CSI Hong Kong Stock Connect Internet Index has a trailing price-to-earnings (P/E) ratio of only 20.06 times, placing it at the 4.3rd percentile of its historical range over the past decade—near historical lows. As key participants in the AI wave, leading internet companies are valued significantly lower than their cloud computing counterparts in the US and A-share markets.
In corporate news, Alibaba Group Chairman Joseph Tsai and CEO Eddie Wu issued a joint letter to shareholders. The letter stated that Alibaba's AI business has moved beyond the initial investment phase and has officially entered a period of commercial returns. Alibaba is increasing its investment in full-stack AI capabilities: it will continue to invest heavily in AI infrastructure and self-developed chips. At the model and application levels, the company will invest in building more powerful foundational model capabilities to attract more applications, while also creating stronger Model-as-a-Service (MaaS) products to connect models and applications more efficiently.
At the recent Alibaba Cloud Summit, Alibaba launched the new-generation flagship model Qwen3.7-Max. In third-party global large model blind tests conducted by Arena, this model ranked first among domestic models, with performance approaching that of the top models from GPT, Claude, and Gemini. Simultaneously, Alibaba released a 128-card super-node server based on T-Head's new-generation AI chip, Zhenwu M890, equipped with the self-developed interconnect chip ICN Switch1.0. This server supports massive concurrent Agent inference, meeting the training and inference demands of the Agentic era.
Amid the ongoing AI token trend, leading internet companies like Alibaba are accelerating their transformation into "AI + Cloud" technology platforms. Analysts note that as the AI rally broadens, Hong Kong's internet sector—given its exposure to domestic computing power and its position to benefit early from AI application deployment—could become a key theme in the market expansion.
For instance, Soochow Securities stated in a research report that the Hong Kong market is currently in a window of "risk appetite recovery + improving fundamental expectations." The AI technology rally is expected to rotate from upstream hardware to mid- and downstream applications, with Hong Kong internet platforms, AI applications, and ecosystem scenarios likely to benefit from this diffusion.
Focus on the potential value re-rating of Hong Kong internet leaders amid the AI token trend. The Hong Kong Internet ETF Huabao (513770) and its feeder funds (Class A: 017125; Class C: 017126) passively track the CSI Hong Kong Stock Connect Internet Index. The index's top ten holdings include tech giants like Alibaba-W and Tencent Holdings, as well as AI application companies across various sectors, highlighting significant leadership advantages. The ETF offers intraday T+0 trading with good liquidity.
For investors bullish on Hong Kong tech but seeking to reduce volatility, consider the first-of-its-kind Hong Kong Large Cap 30 ETF Huabao (520560). It employs a "tech + dividend" barbell strategy, holding both high-growth tech stocks like Alibaba and stable, high-dividend stocks from sectors like banking and insurance, making it an ideal core holding for long-term Hong Kong market exposure.
Reminder: Recent market volatility may be elevated, and short-term price movements are not indicative of future performance. Investors should make rational investment decisions based on their own financial situation and risk tolerance, paying close attention to position sizing and risk management.
Data source: Shanghai and Shenzhen Stock Exchanges, etc.
ETF fee-related notes: When subscribing for or redeeming fund shares, subscription/redemption agents may charge a commission of up to 0.5%, which includes related fees charged by stock exchanges and registration institutions. Feeder fund fee-related notes: For the Huabao CSI Hong Kong Stock Connect Internet ETF Feeder Fund (Class A), the subscription fee (front-end load) is CNY 1,000 per transaction for subscription amounts over CNY 2 million, 0.6% for amounts between CNY 1 million (inclusive) and CNY 2 million, and 1% for amounts below CNY 1 million. The redemption fee is 1.5% for holdings under 7 days and 0% for holdings of 7 days (inclusive) or more; no sales service fee is charged. The Huabao CSI Hong Kong Stock Connect Internet ETF Feeder Fund (Class C) charges no subscription fee; the redemption fee is 1.5% for holdings under 7 days and 0% for holdings of 7 days (inclusive) or more; the sales service fee is 0.3%.
Risk disclosure: The Hong Kong Internet ETF passively tracks the CSI Hong Kong Stock Connect Internet Index. The index's base date is December 30, 2016, and it was launched on January 11, 2021. The index constituents are adjusted according to its compilation rules. The index constituents mentioned are for illustrative purposes only; descriptions of individual stocks are not investment advice of any form and do not represent the holdings or trading activities of any fund managed by the fund manager. The fund manager assesses this fund's risk level as R4 (medium-high risk), suitable for aggressive (C4) or higher risk-tolerance investors. Any information appearing herein (including but not limited to individual stocks, commentary, forecasts, charts, indicators, theories, and any form of expression) is for reference only. Investors are responsible for their own investment decisions. Furthermore, any views, analysis, or forecasts herein do not constitute investment advice to readers, and no liability is accepted for any direct or indirect losses arising from the use of this content. The performance of other funds managed by the fund manager does not guarantee this fund's performance. Past performance of the fund is not indicative of its future results. Fund investment involves risk; invest with caution.
MACD golden cross signals have formed, with some stocks performing well.
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