Core Viewpoint - Since 2025, the Hong Kong stock market, led by technology and innovative pharmaceuticals, has experienced a bull market, with the Hang Seng Index rising over 30% and the Hang Seng Tech Index exceeding 50%. However, since October, the Hang Seng Tech Index has seen a significant pullback of over 15% in less than two months, with a recent streak of four consecutive declines. Analysts believe that this short-term adjustment does not alter the long-term investment logic for leading tech stocks in Hong Kong, especially with the gradual implementation of AI technologies by companies like Tencent and Alibaba, which is expected to drive a second growth phase for internet enterprises. The long-term investment value of the Hang Seng Tech Index remains promising due to valuation advantages, funding support, and AI-driven industrial upgrades [1][3][4]. Group 1: Market Performance - Before October, Hong Kong tech stocks were performing well, with 9 out of 30 constituents of the Hang Seng Tech Index rising over 100%, and the top performer, Hua Hong Semiconductor, increasing nearly 270%. Other notable stocks like Tencent, Baidu, and Xiaomi also saw gains exceeding 50%, while only Meituan and Haier Smart Home experienced declines, with Meituan dropping over 30% [1][2]. - After October, the situation changed dramatically, with only 4 stocks rising, while 7 stocks fell over 20%, including Li Auto and Sunny Optical Technology, which both dropped over 27%. Tencent and Meituan also saw declines of around 5% [2]. Group 2: Fund Flows and Market Sentiment - There has been a noticeable outflow of southbound funds from certain Hang Seng Tech constituents, with Alibaba experiencing the highest net sell-off of 2.5 billion HKD, followed by Li Auto and Sunny Optical Technology with net sell-offs of 1.2 billion HKD and several hundred million HKD, respectively [2]. - The recent downturn in the Hang Seng Tech Index is attributed to three main factors: excessive prior gains leading to profit-taking, the U.S. imposing tariffs and tightening software export controls, and a mini-crash in U.S. AI stocks resulting in a significant drop in global tech risk appetite [2][3]. Group 3: Long-term Investment Logic - Despite short-term volatility, the long-term investment logic for the Hang Seng Tech Index remains intact, as it comprises internet giants and companies in semiconductors and electric vehicles that are considered scarce assets for both domestic and global investors [3][4]. - Analysts suggest that the current valuation of the Hang Seng Index and Hang Seng Tech Index is still significantly lower than their peaks in 2021, indicating potential for recovery and growth in the coming years [3]. Group 4: AI and Market Revaluation - The market is increasingly focused on the tangible effects of AI implementation, moving from a narrative-driven approach to one that emphasizes financial performance. Companies like Tencent and Alibaba are seeing revenue growth attributed to AI applications, with Tencent reporting a 15% year-on-year revenue increase and Alibaba planning substantial investments in AI and cloud infrastructure [5][6]. - The structural revaluation driven by AI and robotics is expected to benefit comprehensive platforms like Tencent, Alibaba, and Baidu, while smaller companies lacking their own ecosystems may face marginalization during the global de-bubble process [6].

Core Viewpoint - Southbound capital transactions today amounted to approximately HKD 839.46 billion, marking a decrease of about HKD 144 billion from the previous day, the lowest level since May 29, accounting for 39.71% of the total turnover of the Hang Seng Index, which fell further today [2] Group 1: Southbound Capital Flow - Southbound capital recorded a net buy of approximately HKD 65.91 billion today, with net inflows from the Shanghai-Hong Kong Stock Connect at about HKD 24.89 billion and from the Shenzhen-Hong Kong Stock Connect at about HKD 41.01 billion [2] - Over the past month, the total southbound capital flow reached approximately HKD 1,322.25 billion, with HKD 648.54 billion from the Shanghai-Hong Kong Stock Connect and HKD 673.71 billion from the Shenzhen-Hong Kong Stock Connect [5] Group 2: Individual Stock Performance - Xiaomi Group-W (01810.HK) saw a significant net buy of HKD 23.94 billion, despite a drop of 4.81% today, with short-term funds increasing their holdings by 95.87 million shares over the past five days [3][4] - Alibaba-W (09988.HK) experienced a net buy of HKD 20.96 billion and a price increase of 1.16%, although short-term funds have reduced their holdings by 12.02 million shares in the last five days [3][4] - China National Offshore Oil Corporation (00883.HK) had a net buy of HKD 2.53 billion and a price increase of 1.19%, with short-term funds increasing their holdings by 4.23 million shares over the past five days [3][4] - Tencent Holdings (0700.HK) faced a net outflow of HKD 1.04 billion, with a slight price decrease of 0.16%, while short-term funds increased their holdings by 1.52 million shares [3][4] - Pop Mart International (09992.HK) saw a net outflow of HKD 0.60 billion and a price drop of 2.27%, with short-term funds increasing their holdings by 5.40 million shares [3][4]

Core Viewpoint - The company reported strong growth in its NOR FLASH storage business, which is a segment of the overall flash memory market, outpacing the market growth in the third quarter [1] Company Performance - The company noted that its third-quarter growth rate in the NOR FLASH segment is significantly higher than the overall market, attributed to its own advancements [1] - The 55nm NOR FLASH has entered mass production in recent quarters, contributing to the company's performance [1] - The 55nm MCU is also entering mass production, further enhancing the company's growth prospects [1] Future Outlook - The company plans to launch 40nm products in the next year or two, which is expected to provide an additional growth impetus [1]

Group 1 - The core concern is the increasing worries about an "AI bubble" leading to significant sell-offs in US tech stocks, with debates on whether AI has driven the market to a bubble state [1] - Pessimists argue that high valuations prompt a tendency to cash out, while optimists, including management from AMD and Nvidia, assert that the demand for AI data centers is real and growing rapidly, distinguishing it from the 2000 internet bubble [1] - UBS Global Wealth Management's Jason Draho suggests that the Chinese tech sector offers an attractive way to balance US tech stock holdings due to the high valuations in the US market [1] Group 2 - Many large Chinese tech companies are valued at only one-third to half of their US counterparts, yet they are launching competitive AI products [1] - The Chinese tech sector, particularly the Hong Kong market, is attracting investors due to its valuation advantages, with the Hong Kong tech index showing a PE ratio around 40% over the past three years, significantly lower than the NASDAQ [1] Group 3 - The first ETF focusing on the Hong Kong chip industry has been launched, comprising 70% hardware and 30% software, and includes 42 Hong Kong tech companies, with significant weights in companies like SMIC and Xiaomi [4] - The ETF aims to capture the potential of the Hong Kong AI hard tech market, excluding large internet firms like Alibaba and Tencent for a sharper focus [4] Group 4 - The ongoing trend of domestic AI chip localization is seen as a long-term necessity, with current conditions viewed as optimal for the development of domestic chips [4] - The ETF tracking the Hong Kong tech index is designed to adapt to market fluctuations, with individual stock weights adjusted semi-annually [5]

Core Insights - The top three companies by Hong Kong Stock Connect holding ratios are China Telecom (72.20%), Gree Power Environmental (69.27%), and COSCO Shipping Energy (69.13%) [1][2] - Xiaomi Group, Tencent Holdings, and Industrial and Commercial Bank of China saw the largest increases in holding amounts over the last five trading days, with increases of +27.92 billion, +13.92 billion, and +12.90 billion respectively [1][2] - The largest decreases in holding amounts were observed in the Yingfu Fund (-62.67 billion), Hang Seng China Enterprises (-21.20 billion), and Hua Hong Semiconductor (-9.12 billion) [1][3] Group 1: Hong Kong Stock Connect Holding Ratios - China Telecom (00728) has a holding of 100.21 billion shares, representing 72.20% [2] - Gree Power Environmental (01330) has a holding of 2.80 billion shares, representing 69.27% [2] - COSCO Shipping Energy (01138) has a holding of 8.96 billion shares, representing 69.13% [2] Group 2: Recent Increases in Holdings - Xiaomi Group (01810) increased its holding by +27.92 billion, with a change of +68.45 million shares [2] - Tencent Holdings (00700) increased its holding by +13.92 billion, with a change of +2.23 million shares [2] - Industrial and Commercial Bank of China (01398) increased its holding by +12.90 billion, with a change of +200.68 million shares [2] Group 3: Recent Decreases in Holdings - Yingfu Fund (02800) decreased its holding by -62.67 billion, with a change of -240.49 million shares [3] - Hang Seng China Enterprises (02828) decreased its holding by -21.20 billion, with a change of -22.67 million shares [3] - Hua Hong Semiconductor (01347) decreased its holding by -9.12 billion, with a change of -11.37 million shares [3]

Market Overview - The US stock market experienced a decline, with the Dow Jones falling by 1.07%, the S&P 500 down by 0.82%, and the Nasdaq decreasing by 1.2% [4] - European stock indices also fell, with Germany's DAX30 down by 1.77%, the UK's FTSE 100 down by 1.27%, and the Euro Stoxx 50 down by 1.9% [4] - Hong Kong's Hang Seng Index continued its downward trend, closing down 1.72% after a drop of 688 points over two days [5] - A-shares showed a mixed performance, with the Shanghai Composite Index down by 0.81%, Shenzhen Component down by 0.92%, and the ChiNext Index down by 1.16% [6] Commodity Prices - Spot gold rose by 0.54% to $4067.51 per ounce, while silver increased by 0.96% to $50.69 per ounce [7] - WTI crude oil rose by 1.39% to $60.57 per barrel, and Brent crude oil increased by 1.18% to $64.46 per barrel [7] Economic Indicators - The US dollar index rose slightly by 0.072% to 99.61 points, while US Treasury yields saw a decline, with the 10-year yield at 4.113% and the 2-year yield at 3.585% [3][7] - The ADP weekly employment report indicated an average weekly job loss of 2500 positions in the private sector [12] Corporate Developments - Nvidia's stock fell by 2.8%, and Amazon's stock decreased by 4.4% amid broader market declines [4] - Pinduoduo's shares dropped over 7%, reflecting negative sentiment in the tech sector [4] - In contrast, Alibaba's stock rose by 1.2%, and Baidu's shares increased by 2.6% [4] Upcoming Events - The US is set to release new economic data, including the Consumer Price Index (CPI) and housing starts, which may impact market sentiment [13][15]

Core Insights - On November 18, China Hongqiao made its first appearance on the Hong Kong Stock Connect active trading list in a month, with a trading volume of 2.42 billion HKD and a net buy of 0.83 billion HKD, despite a closing drop of 5.88% [2]. Trading Activity Summary - The total trading volume of active stocks on the Hong Kong Stock Connect reached 38.66 billion HKD, accounting for 39.31% of the day's total trading amount, with a net buying amount of 7.18 billion HKD [2]. - Alibaba-W led the trading volume with 9.28 billion HKD, followed by Tencent Holdings and Xiaomi Group-W with trading amounts of 5.85 billion HKD and 4.59 billion HKD, respectively [2]. - The most frequently listed stocks in the past month include Alibaba-W and Huahong Semiconductor, each appearing 21 times, indicating strong interest from Hong Kong Stock Connect funds [2]. Individual Stock Performance - China Hongqiao's trading details on November 18 included a trading volume of 2.42 billion HKD and a net buy of 0.83 billion HKD, with a closing price of 21.80 HKD and a daily decline of 5.88% [2]. - Other notable stocks included: - Tencent Holdings: Trading volume of 5.85 billion HKD, net sell of 0.19 billion HKD, closing price of 623.50 HKD, and a daily drop of 2.04% [2]. - Xiaomi Group-W: Trading volume of 4.59 billion HKD, net buy of 0.85 billion HKD, closing price of 40.78 HKD, and a daily decline of 2.81% [2]. - Huahong Semiconductor: Trading volume of 3.61 billion HKD, net buy of 0.37 billion HKD, closing price of 80.25 HKD, and a daily increase of 3.48% [2].

Market Overview - On November 18, the Hang Seng Index fell by 1.72%, with southbound trading totaling HKD 983.54 billion, comprising HKD 529.10 billion in buying and HKD 454.44 billion in selling, resulting in a net buying amount of HKD 74.66 billion [2][3]. Southbound Trading Details - The southbound trading through Stock Connect (Shenzhen) had a total trading amount of HKD 366.04 billion, with net buying of HKD 47.21 billion, while the trading through Stock Connect (Shanghai) totaled HKD 617.50 billion, with net buying of HKD 27.45 billion [2][3]. Active Stocks - Alibaba-W was the most actively traded stock with a total trading amount of HKD 92.79 billion and a net buying amount of HKD 32.97 billion, despite a closing price drop of 0.19% [2][3]. - Other notable stocks included Tencent Holdings with a trading amount of HKD 58.48 billion and a net selling of HKD 1.91 billion, and Xiaomi Group-W with a trading amount of HKD 45.92 billion and a net buying of HKD 8.54 billion [2][3]. Continuous Net Buying - Three stocks experienced continuous net buying for more than three days, with Xiaomi Group-W leading at 15 days, followed by Alibaba-W and Huahong Semiconductor at 4 days each. The total net buying amounts were HKD 106.60 billion for Xiaomi Group-W and HKD 89.99 billion for Alibaba-W [3][4].

Core Insights - On November 18, 2025, Alibaba-W (09988), Tencent Holdings (00700), and Xiaomi Group-W (01810) were the top three companies by trading volume in the Southbound Stock Connect, with trading amounts of 5.863 billion, 3.912 billion, and 3.075 billion respectively [1] - In the Shenzhen-Hong Kong Stock Connect, Alibaba-W (09988), Tencent Holdings (00700), and SMIC (00981) also ranked as the top three, with trading amounts of 3.416 billion, 1.935 billion, and 1.640 billion respectively [1] Southbound Stock Connect - Top Active Companies - Alibaba-W (09988) had a trading amount of 5.863 billion with a net buying amount of +1.678 billion [2] - Tencent Holdings (00700) recorded a trading amount of 3.912 billion with a net selling amount of -0.831 billion [2] - Xiaomi Group-W (01810) achieved a trading amount of 3.075 billion with a net buying amount of +0.633 billion [2] - SMIC (00981) had a trading amount of 2.588 billion with a net selling amount of -0.128 billion [2] - Other notable companies included Huahong Semiconductor (01347) with a trading amount of 2.252 billion and a net buying amount of +29.105 million [2] Shenzhen-Hong Kong Stock Connect - Top Active Companies - Alibaba-W (09988) had a trading amount of 3.416 billion with a net buying amount of +1.618 billion [2] - Tencent Holdings (00700) recorded a trading amount of 1.935 billion with a net buying amount of +0.639 billion [2] - SMIC (00981) achieved a trading amount of 1.640 billion with a net buying amount of +0.502 billion [2] - Xiaomi Group-W (01810) had a trading amount of 1.518 billion with a net buying amount of +0.220 billion [2] - Other significant companies included Huahong Semiconductor (01347) with a trading amount of 1.361 billion and a net buying amount of +0.338 billion [2]

Core Viewpoint - Guosen Securities report indicates that Huahong Semiconductor's Q3 2025 performance exceeded guidance, with steady growth expected in Q4 2025 due to price recovery and product structure optimization [1] Group 1: Performance and Capacity - The company's production capacity is being further released, maintaining stable growth in performance [1] - The utilization rate has remained at full capacity for multiple quarters, with 12-inch capacity steadily contributing to revenue growth [1] Group 2: Market Demand and Product Development - Increased demand for flash memory products and strong demand for analog and power management products are noted [1] - The company aims to enhance its average selling price (ASP) through product structure optimization, targeting the GaN field for power products related to AI applications [1] Group 3: Strategic Outlook - The upgrade of Nor Flash processes and the continuous increase in BCD proportion are part of the company's long-term strategy [1] - The company maintains a competitive edge with leading processes and global top-tier clients in specialty process foundry [1] - Slight adjustments to expense and gross margin rates are made based on company guidance, maintaining an "outperform" rating [1]