Core Viewpoint - The Hong Kong stock technology sector has experienced significant volatility and a deep correction in October 2025, yet there are clear signs of capital inflow through the Hong Kong Stock Connect and related ETFs, indicating a strategic investment interest in this sector [1]. Group 1: Market Trends - As of October 31, 2025, southbound funds have cumulatively net purchased over 12,600 billion HKD in Hong Kong stocks this year, approaching 156% of the total for 2024 [1]. - Southbound funds have recorded a continuous net buying streak for 8 trading days, with a net inflow of over 13.6 billion HKD on October 30, marking a new high in the past nine trading days [1]. - The technology sector in Hong Kong is a key focus for southbound funds due to its scarcity and high growth potential [1]. Group 2: Investment Insights - Huatai Securities notes that the current global financial conditions are conducive to revaluation, with innovations in AI, pharmaceuticals, and consumer sectors boosting long-term profit expectations and reducing risk premiums [1]. - The Hang Seng Technology ETF (513130) has seen a significant inflow of 8.87 billion HKD over four trading days, making it the only ETF tracking the Hang Seng Technology Index to attract over 5 billion HKD during this period [1]. - The Hang Seng Technology Index, which the ETF closely tracks, includes 30 strong R&D internet and technology companies, showcasing a broad representation across various tech sectors [1]. Group 3: Valuation Metrics - The Hang Seng Technology Index exhibits a "global valuation gap," with its current P/E and P/B ratios at approximately 54% and 44% of those of the Nasdaq Index, respectively [1]. - As of October 31, 2025, the P/E and P/B ratios for the Hang Seng Technology Index are 22.85 times and 3.32 times, while the Nasdaq Index stands at 42.30 times and 7.50 times [1]. - The ETF is positioned to benefit from the overall valuation uplift in the Hong Kong technology sector, especially with the anticipated easing of liquidity and favorable conditions for the AI industry [1]. Group 4: Fund Performance - The Hang Seng Technology ETF (513130) has shown varying performance since its inception, with returns of -30.24%, -21.43%, -8.89%, 21.13%, and 16.37% for the years 2021 to 2025 H1, respectively [2]. - The fund's performance benchmark has also fluctuated, with returns of -30.25%, -20.46%, -7.51%, 21.29%, and 16.88% during the same periods [2]. - The ETF is managed by Huatai Baichuan Fund, which has over 18 years of experience in ETF operations and has launched several leading ETFs in the market [1][2].

Group 1 - The Hong Kong stock market experienced a significant recovery after an initial sharp decline, with the Hang Seng Index reducing its drop from 2.67% to 0.57% by the close, indicating a recovery of 2% during the trading session [1] - The Hang Seng Tech Index also showed a similar pattern, with its maximum drop of 3.11% narrowing to a 0.7% decline at the close, suggesting a substantial recovery from earlier losses [1] - The market's volatility is attributed to psychological factors rather than substantial negative impacts, indicating that the fluctuations are likely short-term [1] Group 2 - The recent performance of the Hang Seng Index reflects a shift in foreign investors' attitudes towards Chinese assets, particularly in light of a weakening US dollar and increasing risks in the US stock market [3] - The significant initial drop in the Hong Kong market created a buying opportunity for external funds, leading to a surge in buying activity as the market rebounded [4] - There is a possibility that the Hong Kong market has reached a short-term adjustment point, with the potential for a stronger bottom if the recent low is not revisited [4]