Xin Lang Ji Jin·2025-10-31 06:46Core Viewpoint - The Hong Kong stock market is experiencing a downturn, with the Hang Seng Index dropping over 2%, particularly in the tech sector, while the Hong Kong Internet ETF shows signs of active buying despite market volatility [1][3]. Group 1: Market Performance - The Hang Seng Index has declined by more than 2%, with major tech stocks like Alibaba and Tencent seeing drops of over 3% and 2% respectively [1]. - The Hong Kong Internet ETF (513770) is currently trading at a flat position, indicating a mixed market sentiment despite the ongoing volatility [1][8]. - The Hong Kong Internet ETF has seen a net inflow of 335 million yuan over the past five days, with its total scale exceeding 11.4 billion yuan [8]. Group 2: Industry Insights - Analysts suggest that the easing of US-China relations and policies promoting technological self-reliance may lead to a structural recovery in the Hong Kong tech sector, with a focus on AI industry progress and corporate earnings [1][3]. - The Hong Kong Internet sector is benefiting from the capital market's opening up, with improved mechanisms expected to enhance the quality of overseas listings and deepen cooperation between mainland and Hong Kong markets [3]. - The current price-to-earnings (PE) ratio of the Hong Kong Internet Index is 23.69, which is significantly lower than both US and A-share tech sectors, indicating potential for valuation recovery [6]. Group 3: Key Holdings - The top three holdings in the Hong Kong Internet ETF are Alibaba (19.22%), Tencent (16.46%), and Xiaomi (10.41%), collectively accounting for over 73% of the ETF's total weight [3]. - The index has shown a significant outperformance compared to the Hang Seng Tech Index, particularly in the context of AI-driven market dynamics [5]. Group 4: Historical Performance - The historical performance of the Hong Kong Internet Index shows a mixed trend, with notable fluctuations over the past five years, including a peak increase of 109.31% in 2020 and a decline of 24.74% in 2023 [8]. - The index's performance indicates a potential for recovery, especially given the current low valuation levels compared to historical averages [6].