Core Viewpoint - The influx of capital into Hong Kong stocks through ETFs is reshaping the pricing system of certain core sectors in the market, with significant net inflows recorded this year [1][5]. Group 1: ETF Market Dynamics - As of August 15, 2023, southbound funds have net purchased HK stocks amounting to 938.9 billion HKD, setting a new annual record [1]. - Nine stock ETFs have seen net inflows exceeding 10 billion HKD this year, with six being Hong Kong-themed ETFs [4]. - The performance of Hong Kong-themed ETFs has been particularly strong, with significant increases in assets under management for several key products [2][3]. Group 2: Sector Performance - The internet, non-bank financials, and innovative pharmaceuticals are the three leading themes attracting ETF investments [2]. - The 富国中证港股通互联网ETF has achieved a year-to-date increase of 37.14%, significantly outperforming the沪深300 index [3]. - The 易方达中证香港证券投资主题ETF has recorded a year-to-date return of 64.89%, ranking it among the top in its category [3]. Group 3: Impact on Pricing Power - The growing influence of ETFs is evident as they begin to dominate the pricing of Hong Kong stocks, particularly among listed brokerages [5][6]. - The performance of H-shares has outpaced A-shares, with notable increases in stock prices for companies like 广发证券 and 中金公司 [6]. - The shift in pricing power from foreign capital to domestic capital is becoming more pronounced, driven by the substantial inflow of southbound funds [6][7]. Group 4: Future Outlook - Analysts believe that the current valuation recovery in the Hong Kong market is far from over, with ETFs seen as a prime vehicle for investors to engage in this transformation [8]. - The market is characterized by ample incremental capital, improved risk appetite, and attractive valuations compared to overseas markets [8][9]. - The Hong Kong market is positioned as a significant offshore RMB market, benefiting from both southbound fund inflows and foreign capital reallocation [9].

Group 1 - The core viewpoint is that ETF is reshaping the pricing system of certain core sectors in the Hong Kong stock market, with significant inflows from southbound funds driving this change [1][4][6] - Southbound funds have recorded a net purchase of HKD 358.76 billion in Hong Kong stocks on August 15, marking a new high since the launch of the Stock Connect mechanism, with total net purchases reaching HKD 938.9 billion this year [1][4] - The performance of Hong Kong-themed ETFs has been particularly strong, with six out of nine ETFs that received over HKD 10 billion in net inflows being Hong Kong-themed ETFs [1][4] Group 2 - Three main themes leading the inflow of funds into Hong Kong stocks via ETFs are internet, non-bank financials, and innovative pharmaceuticals, with significant growth in ETF sizes [2][3] - The Fu Guo CSI Hong Kong Internet ETF has seen a net increase of HKD 469.18 billion this year, ranking first in the market, while other ETFs in the technology and financial sectors have also experienced substantial growth [2][3] - The performance of these ETFs is driven by strong earnings, with the Fu Guo CSI Hong Kong Internet ETF up 37.14% this year, significantly outperforming the CSI 300 index [3][4] Group 3 - The increasing influence of southbound funds, particularly through ETFs, is reshaping the pricing power in the Hong Kong stock market, moving from foreign capital to domestic capital [6][7][8] - The market is witnessing a shift in valuation mechanisms, especially in sectors like technology, innovative pharmaceuticals, and non-bank financials, which are increasingly driven by domestic capital [8][9] - The current market environment is characterized by ample incremental capital, improved risk appetite, and attractive valuations compared to overseas markets, indicating a potential for continued valuation recovery in Hong Kong stocks [9][10]

Core Viewpoint - The article highlights the significant role of ETFs in reshaping the pricing system of Hong Kong stocks, driven by substantial inflows of southbound capital, particularly through thematic ETFs focused on sectors like internet, non-bank finance, and innovative pharmaceuticals [1][2][4]. Group 1: ETF Inflows and Performance - As of August 15, southbound capital has net purchased HKD 358.76 billion in Hong Kong stocks in a single day, marking a record high since the launch of the Stock Connect mechanism, with total net purchases reaching HKD 938.9 billion this year [1]. - Thematic ETFs have attracted over HKD 100 billion in net inflows, with six out of nine top-performing stock ETFs being Hong Kong-themed [5]. - Notable ETFs include the Fuqun CSI Hong Kong Internet ETF, which has seen a net increase of HKD 469.18 billion this year, and the E Fund CSI Hong Kong Securities Investment Theme ETF, which has increased by HKD 186.11 billion [3][4]. Group 2: Sector-Specific Insights - The internet, non-bank finance, and innovative pharmaceuticals sectors have shown particularly strong performance, with the E Fund CSI Hong Kong Securities Investment Theme ETF achieving a year-to-date return of 64.89% [4][5]. - The performance of Hong Kong-listed brokerages has been notably strong, with companies like GF Securities and China Galaxy Securities seeing year-to-date gains of 93.34% and 80.23%, respectively [7]. Group 3: Changing Pricing Dynamics - The influence of southbound capital, especially through ETFs, is increasingly evident in the pricing dynamics of Hong Kong stocks, shifting the pricing power from foreign capital to domestic investors [8][9]. - The total growth of ETFs linked to Hong Kong stocks has exceeded HKD 200 billion this year, indicating a significant shift in the market's pricing mechanism [8]. Group 4: Future Outlook - Analysts believe that the current valuation recovery in the Hong Kong market is far from over, with ETFs being seen as a prime vehicle for investors to engage in the evolving pricing system [10]. - The long-term outlook suggests that the Hong Kong market, as a major offshore RMB market, will continue to attract both domestic and foreign capital, enhancing its investment appeal [11].