SMIC(SH:688981) 2 1 Shi Ji Jing Ji Bao Dao·2025-11-26 13:04Core Viewpoint - The Hong Kong technology sector has experienced a correction after reaching a yearly high in early October, with significant declines in major indices, yet ETF funds are increasing their investments in this sector, indicating confidence in the long-term value of technology companies [1][2][3]. Market Performance - The Hong Kong technology indices, including the CSI Hong Kong Stock Connect Technology Index and the Hang Seng Technology Index, have seen declines exceeding 7% in the past month [1][3]. - Major technology stocks such as Alibaba and SMIC have also faced price drops of 6.24% and 15.06% respectively in the same period [2]. Fund Flows - As of November 25, technology-related ETFs in Hong Kong have seen a net inflow of 439 billion yuan over the past month, with 13 Hang Seng Technology ETFs collectively attracting over 240 billion yuan [1][5]. - Specific ETFs like Huatai-PB Hang Seng Technology ETF and Huaxia Hang Seng Technology Index ETF have led the inflows, with amounts of 57.72 billion yuan and 54.47 billion yuan respectively [5][6]. Investor Sentiment - Despite short-term price volatility, the continuous inflow of funds suggests that investors maintain confidence in the long-term value of the Hong Kong technology sector [7]. - The sector is home to many companies with core competitiveness and growth potential, such as Tencent and Alibaba, which are expected to perform well in technology innovation and market share expansion [8]. Valuation Insights - The current valuation of the Hang Seng Technology Index, with a PE ratio of 22.5, is at a relatively low level compared to historical standards, providing a strong investment appeal [8][10]. - The technology sector's valuation is significantly discounted compared to the NASDAQ 100, indicating potential for valuation recovery [10]. AI Bubble Concerns - Concerns regarding an "AI bubble" have emerged, but some analysts remain optimistic, arguing that AI represents a fundamental shift in productivity rather than a mere upgrade of existing technologies [11][12]. - The potential for AI technology remains strong, with expectations that leading companies capable of integrating AI into diverse business scenarios will benefit the most [12][13].