Core Viewpoint - The recent adjustments in the Hong Kong stock technology sector indicate a significant inflow of funds, particularly into the Hang Seng Technology ETF (513130), which has seen a net inflow of 1.468 billion yuan over two trading days, highlighting investor interest in Hong Kong tech assets [1] Fund Performance - The Hang Seng Technology ETF (513130) has experienced continuous weekly growth in fund shares for nearly three weeks, reaching a new high of 50.21 billion shares as of October 14, with a year-to-date increase of 52% [1] - The ETF's performance since its inception shows returns of -30.24% in 2021, -21.43% in 2022, -8.89% in 2023, 21.13% in 2024, and 16.37% in the first half of 2025, compared to its benchmark returns [2] Market Trends - The Hang Seng Technology Index, closely tracked by the ETF, includes 30 major tech companies in Hong Kong, covering various sectors such as internet, software, automotive, and communications, which are expected to benefit from overall valuation increases in the tech sector [1] - Analysts from Guotai Junan Securities suggest that the Hong Kong tech sector will remain a key market driver, with potential for new highs in the fourth quarter due to foreign capital inflows and sustained investment from southbound funds [1] Investor Engagement - The Hang Seng Technology ETF (513130) is popular among investors, with over 220,000 account holders as of the latest mid-year report, and it offers advantages such as large scale, good liquidity, T+0 trading support, and low fees [1] - The fund manager, Huatai-PB Fund, is one of the first ETF managers in China, known for managing several large-scale ETFs, including the top A-share market ETF, the CSI 300 ETF (510300) [1][2]

Core Insights - The Hong Kong stock market showed mixed performance this week, with technology stocks leading gains while pharmaceutical stocks experienced a correction. Southbound capital net purchases exceeded 60 billion HKD [1] - The CSI Hong Kong Stock Connect Internet Index rose by 5.7%, the Hang Seng Technology Index increased by 5.3%, while the CSI Hong Kong Stock Connect Pharmaceutical and Health Comprehensive Index fell by 1.7% [1][3] - The Hang Seng Technology ETF (513010) has seen net inflows for 12 consecutive trading days, totaling over 2.5 billion HKD, with the latest product size reaching 18.2 billion HKD, setting new historical highs [1] Index Performance - The weekly performance of various indices includes: - CSI Hong Kong Stock Connect New Economy Index: +3.4% - Hang Seng Technology Index: +5.3% - CSI Hong Kong Stock Connect Internet Index: +5.7% - CSI Hong Kong Stock Connect Consumption Theme Index: +3.4% - CSI Hong Kong Stock Connect Pharmaceutical and Health Comprehensive Index: -1.7% [3][5] - The rolling price-to-earnings (P/E) ratios for these indices are as follows: - CSI Hong Kong Stock Connect New Economy Index: 24.7x - Hang Seng Technology Index: 22.7x - CSI Hong Kong Stock Connect Pharmaceutical and Health Comprehensive Index: 31.1x - CSI Hong Kong Stock Connect Internet Index: 24.5x - CSI Hong Kong Stock Connect Consumption Theme Index: 21.6x [3][5] Historical Performance - The cumulative performance over different time frames is as follows: - 1-month: Hang Seng Technology Index +6.4%, CSI Hong Kong Stock Connect Pharmaceutical and Health Comprehensive Index +6.2% - 3-month: Hang Seng Technology Index +14.3%, CSI Hong Kong Stock Connect Pharmaceutical and Health Comprehensive Index +28.0% - Year-to-date: Hang Seng Technology Index +34.0%, CSI Hong Kong Stock Connect Pharmaceutical and Health Comprehensive Index +99.4% - 1-year: Hang Seng Technology Index +72.1%, CSI Hong Kong Stock Connect Pharmaceutical and Health Comprehensive Index +109.1% - 3-year: Hang Seng Technology Index +47.2%, CSI Hong Kong Stock Connect Pharmaceutical and Health Comprehensive Index +45.8% - 5-year: CSI Hong Kong Stock Connect Pharmaceutical and Health Comprehensive Index -16.6% [7][8]

Group 1 - The core viewpoint indicates that the earnings expectations for the Hong Kong technology sector have been revised upward, with the information technology industry's earnings expectations seeing the highest increase of 7.8% compared to US and European markets [1] - The Hong Kong stock market has shown a significant recovery in trading volume, with continued inflow of southbound funds amid a global market uptrend [1] - The valuation of the Hong Kong information technology sector stands at a PE ratio of 31.9, while the healthcare sector has the highest valuation in the market at 49.9 [1] Group 2 - The Hong Kong Technology ETF (513020) tracks the Hong Kong Stock Connect Technology Index (931573), which focuses on 30 large-cap technology companies listed in Hong Kong that have high R&D investment and revenue growth [1] - The index is primarily composed of sectors such as information technology, electronic components, and interactive media and services, reflecting the characteristics of high-end manufacturing and hardware infrastructure [1] - Investors without stock accounts can consider the Cathay CSI Hong Kong Stock Connect Technology ETF Initiated Link A (015739) and Link C (015740) [1]