Xin Lang Ji Jin·2025-10-10 11:47Group 1: Market Overview - Hong Kong stocks have experienced significant volatility entering the fourth quarter, with the Hang Seng Index declining for five consecutive days and the Hang Seng Tech Index dropping over 3% [1] - Major internet stocks such as Alibaba, Tencent, Bilibili, Xiaomi, and Meituan have all seen declines, with Alibaba falling by 4.56% [1] - The Hong Kong Internet ETF (513770) opened lower but showed strong buying interest, closing down 3.41% while maintaining a wide premium [1] Group 2: Economic Indicators and Forecasts - There is a divergence in expectations regarding the Federal Reserve's future interest rate cuts, with officials indicating a cautious approach to rate adjustments [2] - Alibaba's investments in AI and instant retail have led to lowered earnings expectations, impacting market sentiment, although long-term growth prospects remain positive [2] - Analysts believe that the fourth quarter will be crucial for establishing a new bull market in Hong Kong stocks, influenced by factors such as US-China negotiations and the Federal Reserve's interest rate decisions [2] Group 3: Capital Flows and Investment Trends - The outlook for Hong Kong stocks is optimistic due to improving fundamentals and capital inflows, particularly from foreign investors and southbound funds [3] - Southbound capital has seen a record net inflow of 1.17 trillion HKD this year, with major internet stocks like Alibaba and Tencent receiving significant investments [3] - The Hong Kong Internet ETF has seen substantial net inflows, indicating strong investor confidence despite market volatility [3][10] Group 4: Sector Performance and Valuation - The Hong Kong Internet sector has shown resilience, with the China Securities Index for Hong Kong Internet stocks outperforming the Hang Seng Tech Index [8] - The current price-to-earnings ratio for the Hong Kong Internet Index is 26.69, which is lower than both US and A-share tech valuations, suggesting potential for growth [8] - The top three holdings in the Hong Kong Internet ETF are Alibaba, Tencent, and Xiaomi, which collectively account for over 46% of the fund's weight [6]