Summary of Key Points from the Conference Call Industry Overview - The report focuses on the **Chinese equity market** and the positioning of **foreign institutional investors** in Chinese equities during **3Q25**. Core Insights and Arguments 1. **Increased Foreign Investment**: International investors increased their positions in Chinese equities, reducing their underweight from **-1.6% to -1.3%** during the quarter, marking the least underweight since **4Q22** [2][3] 2. **Sector Preferences**: The most significant additions by international investors were in the **healthcare, insurance, energy & materials, and internet sectors**, while positions in **auto and tech** were reduced [2][5] 3. **Stock Connect Activity**: Southbound inflows reached **US$56 billion**, matching the record level from **1Q25**, with net inflows across all sectors. The top sectors for southbound investment included **consumer discretionary, financials, and healthcare** [2][4] 4. **Northbound Outflows**: In contrast, northbound investments saw a net outflow of **US$18 billion** in **3Q25**, with significant sell-offs in **financials, staples, and utilities** [4][5] 5. **Active Fund Dynamics**: Approximately **800 active foreign funds** hold **US$270 billion** in Chinese stocks, with **145 funds** (AUM **US$212 billion**) not holding any Chinese equities as of **3Q25**, down from **167 funds** in **2Q25** [3][9] 6. **Crowding Observations**: Active foreign institutional investors favored growth sectors like **healthcare, insurance, and internet**, while selling off auto and tech stocks. The **crowding score** for sectors like **renewables and defensives** increased, while **banks, healthcare, and internet** saw declines [5][39] Additional Important Insights 1. **Top Bought Stocks**: Notable stocks with significant foreign inflows included **Alibaba Health Information Technology Ltd.** (7.5% increase), **Bilibili, Inc.** (4.7%), and **Zhongan Online P&C Insurance Co.** (4.3%) [17] 2. **Top Sold Stocks**: Stocks with the most significant outflows included **China Mengniu Dairy** (-2.0%), **Agile Group Holdings** (-2.1%), and **BYD Company** (-4.4%) [18] 3. **Risks Identified**: Potential risks for Chinese equities include a hard landing in the property market, capital outflows due to currency depreciation, and slow structural reforms. Inadequate government policies could exacerbate these risks [48] 4. **Valuation Methods**: Various valuation approaches are employed, including DCF models, Gordon growth model analysis, and relative valuation using multiples like PE, EV/EBITDA, and P/BV [47] This summary encapsulates the key points from the conference call, highlighting the dynamics of foreign investment in the Chinese equity market, sector preferences, and potential risks facing the market.

人民财讯11月5日电，南向资金今日净买入103.73亿港元。其中，阿里巴巴、小米集团分别获净买入8.91 亿港元、6.51亿港元；华虹半导体净卖出额居首，金额为6.41亿港元。 ...

Core Viewpoint - In October, southbound funds recorded a cumulative net inflow of 92.5 billion HKD, a decrease of approximately 50% compared to September, primarily due to the suspension of Hong Kong Stock Connect trading during the National Day holiday [2][4]. Fund Flow Summary - Overall, southbound funds remained predominantly inflow-oriented in October, but the intensity of inflows weakened as the Hang Seng Index experienced volatility [4]. - The cumulative transaction volume of southbound funds reached 2,310.835 billion HKD, accounting for only 42% of the Hang Seng Index's total transaction volume, marking a low point since the beginning of the year [7]. Industry Analysis - In October, there was increased attention on the financial and energy sectors, with net inflows of 20.811 billion HKD and 9.27 billion HKD, respectively. Conversely, interest in technology and healthcare sectors declined [6]. - The inflow to the information technology sector decreased by over 40% month-on-month, while the healthcare sector saw a net outflow exceeding 5 billion HKD, likely due to the high cumulative gains in the innovative drug sector this year [6]. Stock Performance - Notable net inflows were observed in: - Xiaomi Group-W (01810.HK): 6.728 billion HKD - Meituan-W (03690.HK): 5.409 billion HKD - China National Offshore Oil Corporation (00883.HK): 4.713 billion HKD - Pop Mart (09992.HK): 4.182 billion HKD [8][9] - Significant net outflows were recorded for: - SMIC (00981.HK): 6.480 billion HKD - Alibaba-W (09988.HK): 5.750 billion HKD - Tencent Holdings (00700.HK): 1.970 billion HKD [9]. Recent Trends - Xiaomi Group-W experienced a cumulative decline of 20% in October, with short-term fund inflows slowing down [10]. - Meituan-W saw a cumulative decline of 2.39%, with a similar trend of slowing short-term fund inflows [11]. - China National Offshore Oil Corporation recorded a cumulative increase of 3.83%, with accelerated short-term fund inflows [12]. - Alibaba-W faced a cumulative decline of 6.72%, with continuous outflows of short-term funds [13].

Group 1 - The net inflow of southbound funds today amounted to 2.873 billion HKD [1] - The top three stocks with net inflows were SMIC, Tencent Holdings, and Hua Hong Semiconductor, with net purchases of 1.143 billion HKD, 1.03 billion HKD, and 986 million HKD respectively [1] - On the other hand, Alibaba-W, Li Auto-W, and Xiaomi Group-W experienced net outflows of 1.985 billion HKD, 813 million HKD, and 117 million HKD respectively [1]

Summary of Key Points Core Viewpoint - The southbound capital market shows active trading with notable net buying and selling activities among specific stocks, indicating investor sentiment and market trends in Hong Kong [2]. Group 1: Net Buying Stocks - Meituan-W (3690.HK) had the highest net buying amount of 654.8 million HKD, closing at 100.6 HKD with a price increase of 0.60% [4]. - SMIC (0981.HK) recorded a net buying of 602 million HKD, closing at 80.0 HKD with an increase of 8.04% [4]. - CNOOC (0883.HK) saw a net buying of 571 million HKD, closing at 20.02 HKD with a slight increase of 0.50% [4]. - Tencent Holdings (0700.HK) had a net buying of 375 million HKD, closing at 637.5 HKD with a rise of 0.71% [4]. - Xiaomi Group-W (1810.HK) experienced a net buying of 299 million HKD, closing at 45.92 HKD with a decrease of 1.75% [4]. - Alibaba-W (9988.HK) had a net buying of 171 million HKD, closing at 168.3 HKD with an increase of 2.25% [4]. - Hua Hong Semiconductor (1347.HK) recorded a net buying of 70 million HKD, closing at 82.4 HKD with a significant increase of 13.73% [4]. Group 2: Net Selling Stocks - Pop Mart (9992.HK) had the highest net selling amount of 628.6 million HKD, closing at 230.4 HKD with a decrease of 0.86% [2][4]. - Li Auto-W (2015.HK) experienced a net selling of 114 million HKD, closing at 85.1 HKD with a decrease of 2.07% [4]. - ZTE Corporation (0763.HK) saw a net selling of 130 million HKD, closing at 40.38 HKD with an increase of 5.32% [4]. - UBTECH (9880.HK) had a net selling of 211 million HKD, closing at 142.7 HKD with an increase of 6.81% [4]. - CSPC Pharmaceutical Group (1093.HK) recorded a net selling of 247 million HKD, closing at 7.89 HKD with a decrease of 3.90% [4].

Market Overview - On October 23, the Hang Seng Index rose by 0.72%, with total southbound trading amounting to HKD 120.19 billion, including buy transactions of HKD 62.77 billion and sell transactions of HKD 57.42 billion, resulting in a net buying amount of HKD 5.34 billion [1] Southbound Trading Details - The southbound trading through Stock Connect (Shenzhen) had a total trading amount of HKD 44.61 billion, with buy transactions of HKD 22.59 billion and sell transactions of HKD 22.02 billion, leading to a net buying amount of HKD 0.57 billion [1] - The southbound trading through Stock Connect (Shanghai) had a total trading amount of HKD 75.58 billion, with buy transactions of HKD 40.18 billion and sell transactions of HKD 35.40 billion, resulting in a net buying amount of HKD 4.77 billion [1] Active Stocks - The most actively traded stock by southbound funds was Alibaba-W, with a total trading amount of HKD 82.52 billion, followed by Pop Mart and SMIC with trading amounts of HKD 70.27 billion and HKD 61.07 billion, respectively [1] - In terms of net buying, China National Offshore Oil Corporation led with a net buying amount of HKD 9.80 billion, with a closing price increase of 2.15%. Pop Mart and Meituan-W followed with net buying amounts of HKD 7.93 billion and HKD 5.24 billion, respectively [1] Net Selling Stocks - The stock with the highest net selling amount was Hua Hong Semiconductor, with a net selling of HKD 10.14 billion and a closing price decrease of 4.61%. Other notable net selling stocks included Innovent Biologics and Xiaomi Group-W, with net selling amounts of HKD 1.40 billion and HKD 0.57 billion, respectively [1] Continuous Net Buying - Two stocks experienced continuous net buying from southbound funds for more than three days: SMIC and Pop Mart, with net buying days of three each. Pop Mart had the highest net buying amount during this period at HKD 21.54 billion, followed by SMIC with HKD 11.96 billion [2]

Market Overview - On October 21, the Hang Seng Index rose by 0.65%, with total southbound trading amounting to HKD 126.49 billion, including buy transactions of HKD 63.83 billion and sell transactions of HKD 62.66 billion, resulting in a net buying amount of HKD 1.17 billion [1] Southbound Trading Details - The southbound trading through Stock Connect (Shenzhen) had a cumulative trading amount of HKD 45.84 billion, with buy transactions of HKD 22.25 billion and sell transactions of HKD 23.60 billion, leading to a net selling amount of HKD 1.35 billion [1] - Conversely, the Stock Connect (Shanghai) recorded a cumulative trading amount of HKD 80.65 billion, with buy transactions of HKD 41.59 billion and sell transactions of HKD 39.06 billion, resulting in a net buying amount of HKD 2.52 billion [1] Active Stocks - Among the actively traded stocks, Alibaba-W had the highest trading amount at HKD 103.30 billion, followed by SMIC with HKD 78.05 billion and Pop Mart with HKD 58.97 billion [1] - In terms of net buying, Pop Mart led with a net buying amount of HKD 11.21 billion despite a closing price drop of 8.08%, followed by Xiaomi Group-W with HKD 4.81 billion and Hua Hong Semiconductor with HKD 4.41 billion [1] - The stock with the highest net selling was the Tracker Fund of Hong Kong, with a net selling amount of HKD 11.02 billion, while Alibaba-W and Innovent Biologics experienced net selling amounts of HKD 4.30 billion and HKD 0.78 billion, respectively [1] Detailed Stock Performance - The following table summarizes the trading performance of selected stocks on October 21: - Pop Mart: Total trading amount of HKD 589.69 million, net buying of HKD 112.07 million, with a price drop of 8.08% [3] - Xiaomi Group-W: Total trading amount of HKD 357.59 million, net buying of HKD 48.11 million, with a price drop of 1.44% [3] - Hua Hong Semiconductor: Total trading amount of HKD 366.72 million, net buying of HKD 44.13 million, with a price drop of 0.26% [3] - Tencent Holdings: Total trading amount of HKD 461.03 million, net selling of HKD 3.19 million, with a price increase of 0.48% [3] - Alibaba-W: Total trading amount of HKD 1,033.04 million, net selling of HKD 42.98 million, with a price increase of 1.98% [3] - Tracker Fund of Hong Kong: Total trading amount of HKD 111.86 million, net selling of HKD 110.23 million, with a price increase of 0.68% [3]

Core Viewpoint - On October 14, the Hang Seng Index fell by 1.73%, with southbound funds totaling HKD 181.245 billion in trading volume, resulting in a net inflow of HKD 8.603 billion [1]. Southbound Fund Activity - The total trading volume for southbound funds was HKD 181.245 billion, with buy transactions amounting to HKD 94.924 billion and sell transactions at HKD 86.321 billion, leading to a net buy of HKD 8.603 billion [1]. - The trading volume for the Shenzhen Stock Connect was HKD 69.553 billion, with net buying of HKD 3.631 billion, while the Shanghai Stock Connect had a trading volume of HKD 111.691 billion and a net buying of HKD 4.973 billion [1]. Active Stocks - Alibaba-W had the highest trading volume among southbound funds at HKD 21.024 billion, followed by SMIC at HKD 12.981 billion and Tencent Holdings at HKD 7.405 billion [1]. - The top net buying stocks included Southern Hang Seng Technology with a net buy of HKD 1.147 billion, Xiaomi Group-W with HKD 0.923 billion, and Tencent Holdings with HKD 0.663 billion [1]. - The largest net sell was recorded for SMIC at HKD 0.958 billion, with Alibaba-W and Innovent Biologics also experiencing significant net sells of HKD 0.795 billion and HKD 0.767 billion, respectively [1]. Continuous Net Buying and Selling - Xiaomi Group-W was the only stock with continuous net buying for over three days, accumulating a total net buy of HKD 5.632 billion over seven days [2]. - The stocks with the highest continuous net selling included SMIC and Alibaba-W, with total net sells of HKD 6.587 billion and HKD 4.979 billion, respectively [2].

Core Insights - Southbound funds recorded a trading volume of approximately 181.25 billion HKD, a decrease of about 45.8 billion HKD compared to the previous day, accounting for 45.44% of the total turnover of the Hang Seng Index, marking two consecutive days below 50% [1] - The Hang Seng Index continued to decline, while southbound funds increased their positions with a net purchase of approximately 8.60 billion HKD, including a net inflow of about 4.97 billion HKD from the Shanghai-Hong Kong Stock Connect and 3.63 billion HKD from the Shenzhen-Hong Kong Stock Connect [1] Individual Stock Performance - Xiaomi Group-W (01810.HK) saw a net purchase of 0.92 billion HKD, with a short-term decline of 0.94% and an increase of 5.26 million shares over the past five days [2][3] - Tencent Holdings (0700.HK) experienced a net purchase of 0.66 billion HKD, with a short-term decline of 2.82% and an increase of 451,000 shares over the past five days [2][3] - Crystal Technology Holdings (02228.HK) had a net purchase of 0.43 billion HKD, with a short-term decline of 2.58% and a reduction of 1.017 million shares over the past five days [2][3] - Semiconductor Manufacturing International Corporation (00981.HK) faced a net outflow of 0.96 billion HKD, with a significant short-term decline of 8.48% and a reduction of 1.769 million shares over the past five days [2][3] - Alibaba Group-W (09988.HK) saw a net outflow of 0.80 billion HKD, with a short-term decline of 4.31% and an increase of 5.099 million shares over the past five days [2][3] - ZTE Corporation (00763.HK) experienced a net outflow of 0.65 billion HKD, with a short-term decline of 9.47% and an increase of 1.409 million shares over the past five days [2][3] Trading Activity Summary - The net inflow from southbound trading was 8.60 billion HKD, with 4.97 billion HKD from the Shanghai-Hong Kong Stock Connect and 3.63 billion HKD from the Shenzhen-Hong Kong Stock Connect [4] - The top active stocks in the southbound trading included Alibaba Group-W, Semiconductor Manufacturing International Corporation, and Tencent Holdings, with notable net outflows for Alibaba and Semiconductor Manufacturing International Corporation [5]

Group 1 - Southbound funds recorded a net sell of 399 million HKD [1] - The top three net purchases were from Xiaomi Group-W, Pop Mart, and ZTE Corporation, with net purchases of 933 million HKD, 670 million HKD, and 491 million HKD respectively [1] - The companies with the highest net sells were SMIC, Alibaba-W, and Hua Hong Semiconductor, facing net sells of 2.709 billion HKD, 1.81 billion HKD, and 1.145 billion HKD respectively [1]