Core Insights - Investing in China and Chinese technology and retail companies has become more favorable in recent quarters, with major companies like Tencent Holdings showing strong performance over the last two years [1] Group 1: Company Performance - Major Chinese technology companies have performed well, particularly Tencent Holdings, indicating a potential for long-term investment opportunities [1] Group 2: Investment Focus - The analysis emphasizes high-quality companies that can outperform the market due to competitive advantages and defensibility, with a focus on both European and North American companies across various market capitalizations [1]

Group 1 - On January 23, 2026, Alibaba-W (09988), Pop Mart (09992), and Tencent Holdings (00700) ranked as the top three companies by trading volume in the Southbound Stock Connect, with transaction amounts of 4.748 billion, 2.660 billion, and 2.614 billion respectively [1] - In the Southbound Stock Connect for the Shenzhen-Hong Kong Stock Connect, Alibaba-W (09988), Tencent Holdings (00700), and Pop Mart (09992) also held the top three positions, with transaction amounts of 3.322 billion, 1.798 billion, and 1.370 billion respectively [1] Group 2 - In the Southbound Stock Connect, the top active trading companies included Alibaba-W (09988) with a net buy amount of -0.595 billion, Pop Mart (09992) with a net buy amount of +0.480 billion, and Tencent Holdings (00700) with a net buy amount of +0.396 billion [2] - In the Shenzhen-Hong Kong Stock Connect, Alibaba-W (09988) had a net buy amount of -0.895 billion, Tencent Holdings (00700) had a net buy amount of -0.156 billion, while Pop Mart (09992) recorded a net buy amount of +0.268 billion [2]

Core Insights - The capital market's enthusiasm for AI has shifted from grand narratives to financial performance, marking a significant transition in 2026 [1] - The AI industry has evolved into distinct segments: computing infrastructure, model building, end-user applications, and regulatory reshaping [2] - The A-share market experienced a structural bull market in 2025, with leading companies like Zhongji Xuchuang and Industrial Fulian achieving significant growth [2][3] Group 1: Market Dynamics - In 2025, the AI sector saw a notable split between A-shares and Hong Kong stocks, with companies like Zhongji Xuchuang and Industrial Fulian leading in valuation restructuring [1] - The successful IPOs of companies like Moer Thread and Muxi Co. on the Sci-Tech Innovation Board indicate a shift of domestic GPUs from experimental stages to large-scale production [3] - The Hong Kong market acted as a bellwether for AI applications, with companies like Cloud Wisdom successfully raising funds and positioning themselves in the AI+ healthcare sector [3] Group 2: Regulatory Environment - The beginning of 2026 brought regulatory scrutiny to industries like food delivery and transportation, impacting companies that rely heavily on algorithm-driven profits [2][7] - The case of Ctrip Group highlights the risks associated with algorithmic monopolies, as the company faced an antitrust investigation that affected its stock price [7] Group 3: Technological Advancements - The focus in 2026 is shifting towards "intelligent agents" and edge hardware, with expectations for a significant drop in development costs for AI agents [8] - The anticipated end of Windows 10 support and a decrease in edge computing costs are expected to drive the adoption of AI PCs and smartphones [8] Group 4: Investment Opportunities - Companies specializing in advanced packaging and new storage solutions, such as Zhaoyi Innovation and Changdian Technology, are expected to benefit from the evolving AI infrastructure [9] - The market is optimistic about the potential of domestic computing capabilities, viewing 2026 as a pivotal year for AI infrastructure development in China [9] Group 5: Future Outlook - The AI industry is expected to transition from speculative narratives to tangible productivity enhancements, with companies that can effectively leverage intelligent agents poised for success [10] - The market is likely to favor businesses that operate within regulatory boundaries and demonstrate real value creation through AI [10]

Core Viewpoint - The transformative impact of AI on work, life, and research is profound, and it is becoming a fundamental infrastructure and core productivity driver across various industries [3]. Group 1: AI's Role in Economic Transformation - The world is at a critical juncture in global economic transformation, where AI is no longer optional and has moved beyond being an experimental technology [3]. - Companies' ability to effectively utilize AI will determine their long-term competitive advantage [3]. Group 2: Tencent's Approach to AI - Tencent views AI not just as a technological breakthrough but as a cornerstone for long-term resilient growth [3]. - The company emphasizes a user-centered approach, ensuring that technology genuinely improves people's lives [3]. - Tencent's innovation strategy involves internal testing and iteration within its vast business ecosystem before offering solutions to various industries [3]. Group 3: Practical Applications of AI - Currently, 90% of Tencent's developers are using the AI programming assistant CodeBuddy, which has improved coding efficiency by over 40% [4]. - The product is also being utilized by serious enterprise clients, including financial institutions [4]. - Successful integration of AI rooted in user value creates a positive cycle of commercial success and social value [4].

Core Viewpoint - The Hong Kong stock market experienced significant net selling from northbound capital, totaling HKD 16.01 billion on January 23, with notable net selling in Alibaba, China Mobile, and Changfei Optical Fiber Cable, while Pop Mart, Xiaomi, and Tencent saw net buying [1][2]. Group 1: Northbound Capital Activity - Northbound capital recorded a net selling of HKD 16.01 billion, with HKD 5.6 billion from Shanghai Stock Connect and HKD 10.41 billion from Shenzhen Stock Connect [1]. - The most net bought stocks included Pop Mart (HKD 7.47 billion), Xiaomi (HKD 6.08 billion), and Tencent (HKD 2.4 billion) [4][5]. - The most net sold stocks were Alibaba (HKD 14.9 billion), China Mobile (HKD 6.22 billion), and Changfei Optical Fiber Cable (HKD 1.38 billion) [7][8]. Group 2: Individual Company Insights - Pop Mart (09992) reported a net buying of HKD 7.47 billion, driven by the successful launch of its Valentine's Day limited edition blind box and recent share buybacks totaling over HKD 300 million, indicating confidence in long-term growth [4]. - Xiaomi Group (01810) saw a net buying of HKD 6.08 billion, with plans to repurchase up to HKD 25 billion of its B shares, reflecting confidence in its business outlook [5]. - Tencent Holdings (00700) had a net buying of HKD 2.4 billion, supported by positive analyst reports highlighting resilience in its core business and AI developments [5]. - Alibaba (09988) faced a net selling of HKD 14.9 billion, as it prepares for the potential IPO of its AI chip subsidiary, T-Head, although the timeline remains uncertain [7]. - China Mobile (00941) experienced a net selling of HKD 6.22 billion, indicating market concerns [8].

Core Viewpoint - Tencent Cloud has achieved profitability in 2025, marking a significant milestone after years of striving for breakeven, but faces intensified competition in the AI cloud era ahead [2][5][6]. Group 1: Financial Performance - Tencent Cloud has reportedly reached breakeven in 2025 and even generated profits, fulfilling the group's expectations [2]. - The revenue growth in 2025 was driven by products such as GPU, storage, and audio-video services, benefiting from a surge in AI demand and increased storage prices [2][3]. - Tencent Cloud's profit achievement is a result of a strategic shift initiated in 2022, focusing on sustainable revenue structures rather than absolute revenue figures [4]. Group 2: Strategic Transformation - The company has undergone a significant transformation over the past three years, moving from a focus on market share to a healthier revenue model, which included cutting low-profit projects [4]. - The sales team has adapted to new performance metrics emphasizing profitability, leading to the cessation of many large but unprofitable projects [4]. - Tencent Cloud has successfully completed performance targets across various business lines, including finance, education, and government sectors, as well as expanding its international client base [3][4]. Group 3: Competitive Landscape - The competitive landscape is intensifying, with Alibaba Cloud aiming for a 30% revenue growth in Q3 2025 and targeting to capture 80% of the incremental AI cloud market in 2026 [5]. - Other competitors, such as Volcano Engine, are also aggressively pursuing growth, with a revenue target exceeding 20 billion yuan in 2026, indicating a challenging environment for Tencent Cloud [5]. - The upcoming year is expected to present significant challenges for Tencent Cloud as it navigates through increased competition and strives for further growth [6].

- The report defines long-term heavy positions as stocks that appear in the top ten holdings of a fund for four or more consecutive reporting periods[9] - The report provides a list of stocks heavily held by funds in Q4 2025, including CATL, Tencent Holdings, Zijin Mining, Kweichow Moutai, and Midea Group[9][10] - The report calculates the termination ratio of long-term heavy positions for Q4 2025 using the formula: $$ \text{Termination Ratio} = \frac{\text{Number of funds terminating long-term heavy positions in Q4 2025}}{\text{Number of funds holding long-term heavy positions in Q3 2025}} $$[14] - The report identifies stocks with the highest and lowest termination ratios in Q4 2025, such as Xiaomi Group and Poly Developments with high termination ratios, and Baili Tianheng and Zijin Mining with low termination ratios[14][18] - The report also analyzes the termination ratios of long-term heavy positions by industry, noting that the media, food and beverage, and electrical equipment industries have relatively low termination ratios, indicating fund managers' optimism about these sectors[20][22]

Group 1 - The core viewpoint of the article is the analysis of long-term heavy holdings by funds, identifying key stocks that are consistently held over multiple reporting periods, such as Ningde Times, Tencent Holdings, Zijin Mining, Kweichow Moutai, and Midea Group [4][5] Group 2 - In the long-term heavy holdings change, stocks like Xiaomi Group and Poly Developments have a high termination ratio in Q4 2025, while stocks like Baillie Tianheng and Zijin Mining have a low termination ratio [2][6] Group 3 - Industry-wise, the media, food and beverage, and electric equipment sectors show relatively low termination ratios for long-term holdings, indicating a positive outlook from fund managers for these sectors [3][9]

值得关注的是，近期，反腐专题片《一步不停歇 半步不退让》披露的"浙江用AI查出贪官"案例引发关注和热议，而此 次腾讯在通报中也特别提及使用了技术手段赋能反腐。 腾讯表示，近年来，为主动、精准地识别舞弊线索，腾讯系统化梳理了过往案例中的关键风险点，通过自建的多个AI 分析工具构建了动态风险模型，在合作伙伴准入、项目招投标、合同管理、交付验收、费用报销中，主动发现并调查 处理了多起违规案件。通过持续的案件反馈，不断提升模型的准确度和深化探索AI与大数据分析技术在舞弊线索主动 挖掘中的应用，有助于更早发现风险、完善内控，从而减少舞弊发生。 腾讯持续反腐，与过往不同的是，特别提及了技术手段尤其是AI赋能反腐的实践。 1月23日，腾讯集团发布《腾讯集团反舞弊通报》，披露2025年度反腐"成绩单"。这是腾讯连续第七年对外公开内部 反腐情况。 通报显示，2025年全年，腾讯反舞弊调查部共发现并查处触犯"腾讯高压线"案件70余起，90余人因触犯"腾讯高压 线"被解聘，其中20余人因涉嫌犯罪被移送公安机关处理，30余名涉案外部人员也被公安机关一并抓捕。 延续高压态势，AI技术深化反腐 腾讯在通报中重申了对舞弊行为的"零容忍"态 ...

Market Overview - The Hong Kong stock market indices collectively rose on January 23, with the Hang Seng Index increasing by 0.45% to 26,749 points, the Hang Seng China Enterprises Index up by 0.51%, and the Hang Seng Tech Index rising by 0.62% [1][2]. Key Stock Movements - Major tech stocks saw gains, with Xiaomi Group and Kuaishou both rising nearly 3%, Alibaba up over 2%, and JD.com and Meituan also showing increases [2][4]. - The commercial aerospace sector experienced significant gains, with JunDa shares soaring over 51% following the launch of six platforms related to commercial aerospace in Beijing [6]. - Brain-computer interface stocks were active, with Lens Technology rising over 9% [7]. - Gold stocks continued to strengthen, with Zijin Mining International increasing by over 8% as gold prices reached new highs [9]. - Solar energy stocks surged, with Keyuan New Energy rising over 14% and several others following suit [10]. Sector Performance - The commercial aerospace sector led the market with notable gains, driven by the launch of new platforms aimed at enhancing the industry [6]. - The brain-computer interface sector showed strong activity, supported by advancements in flexible chip technology [7]. - Gold stocks benefited from rising gold prices, which reached a historical high of $4,940.78 per ounce [9]. - The solar energy sector was buoyed by positive remarks from Tesla's CEO regarding solar capacity expansion [10]. Individual Stock Highlights - JunDa shares rose by 51.40% to 39.00, while other aerospace-related stocks also saw significant increases [6]. - Lens Technology increased by 9.36% to 31.78, reflecting strong interest in brain-computer interface technologies [8]. - Zijin Mining International rose by 8.43% to 205.80, benefiting from the surge in gold prices [9]. - Keyuan New Energy saw a rise of 14.44% to 4.36, reflecting optimism in the solar energy market [11]. Future Outlook - The Hong Kong stock market is expected to see a recovery in profit growth by mid-2026, with a slowdown in competition among internet platforms and a reduction in the drag from non-essential consumer spending [26].