Core Insights - The Hong Kong Stock Connect market is undergoing normalization adjustments, with 67 stocks added and 61 removed by the end of September 2025, raising concerns about the assessment period and subsequent price volatility of newly listed stocks [1][2] Group 1: Stock Inclusion Rules - Stocks must achieve an average daily market capitalization covering the top 95% in the Hong Kong market and pass liquidity tests to be included in the Hang Seng Composite Index [1] - Large and medium-sized stocks can be directly included in the Stock Connect, while small stocks must meet an additional requirement of an average month-end market capitalization of at least 5 billion HKD [1][2] Group 2: Market Manipulation Concerns - Companies with low market capitalization and small float are targeted for speculation due to their "easily manipulable" nature, leading to two types of market activities: collusion between companies and funds, and passive speculation by market funds [4] - The cases of Yaojie Ankang and Cao Cao Chuxing exemplify these speculative activities, where funds leveraged the inclusion in Stock Connect for profit [4] Group 3: Yaojie Ankang Case - Yaojie Ankang, a clinical-stage biopharmaceutical company, raised only 200 million HKD during its IPO, the smallest in the medical sector for 2025, and had a highly concentrated shareholding structure [5] - After being included in the Stock Connect on September 8, 2025, the stock price surged due to passive fund inflows, but subsequently plummeted by 54% in a single day, trapping retail investors [6][5] Group 4: Cao Cao Chuxing Case - Cao Cao Chuxing faced weak institutional demand during its IPO, leading to a reliance on retail investors to fill the gap [7] - Following its inclusion in the Stock Connect, the stock price initially surged by 143% but then fell sharply, indicating potential market manipulation [9][10] Group 5: Trading Data Insights - Trading data revealed that Citibank was the largest net buyer before the inclusion, but quickly became the largest net seller afterward, suggesting a strategy of accumulating shares before the inclusion and selling to retail investors post-inclusion [10][12]

Core Insights - The Hong Kong Stock Connect market is undergoing normalization adjustments, with 67 stocks included and 61 stocks removed as of September 30, 2025, raising concerns about the assessment period and subsequent price volatility of newly listed stocks [1] Group 1: Inclusion Rules - Stocks must achieve a daily average market capitalization covering the top 95% in the Hong Kong market and pass liquidity tests to be included in the Hang Seng Composite Index [2] - The Hang Seng Composite Index categorizes stocks into large, medium, and small caps, with small caps needing an average month-end market capitalization of at least 5 billion HKD for inclusion in the Stock Connect [2] Group 2: Adjustment Timing - Regular adjustments occur at the end of June and December, with qualifying stocks added to the index and Stock Connect in September and March of the following year [3] - A fast-track mechanism allows newly listed companies to be included in the index and Stock Connect if they meet market capitalization and liquidity criteria shortly after listing [3] Group 3: Market Manipulation Concerns - Companies with low market capitalization and small float are targeted for speculation, with two types of funds involved: those colluding with companies for shareholder exits and those speculating based on index inclusion expectations [5] - The cases of Yaojie Ankang and Cao Cao Chuxing exemplify these speculative activities, where stock prices surged due to passive fund inflows and subsequently crashed [5] Group 4: Yaojie Ankang Case Study - Yaojie Ankang, a clinical-stage biopharmaceutical company, raised only 200 million HKD in its IPO, the smallest in the medical sector for 2025, and had a highly concentrated shareholding structure [6] - After being included in the Stock Connect on September 8, 2025, the stock price surged over 200% due to passive fund inflows but later plummeted by 54% in a single day, indicating a lack of fundamental support for the price increase [7][8] Group 5: Cao Cao Chuxing Case Study - Cao Cao Chuxing, a ride-hailing platform, faced weak institutional demand during its IPO, leading to a significant drop in its stock price on the first day [9] - Following its inclusion in the Stock Connect, the stock price initially rose by 143% but then fell sharply, suggesting potential market manipulation as funds sold off after retail investors entered the market [10]

Core Insights - The Hong Kong Stock Connect market is undergoing normalization adjustments, with 67 stocks included and 61 stocks removed as of September 30, 2025, raising concerns about the assessment cycle and subsequent price volatility of newly listed stocks [1][6]. Inclusion Rules - Stocks must meet specific criteria to be included in the Hong Kong Stock Connect, including a daily average market capitalization covering the top 95% in the Hong Kong market and passing liquidity tests [2]. Adjustment Timeline - The review dates for adjustments are typically at the end of June and December, with eligible stocks being added to the Hang Seng Composite Index and the Stock Connect in September and March of the following year [3]. Market Manipulation Concerns - Smaller companies with low market capitalization are often targeted for manipulation due to their susceptibility to price movements with minimal capital, leading to two types of speculative activities: collusion between companies and funds, and passive speculation based on index inclusion expectations [5]. Case Study:药捷安康 - After its inclusion in the Stock Connect,药捷安康's stock price surged over 200% before plummeting 54% due to a lack of fundamental support, indicating that speculative trading led to significant losses for retail investors [6][8]. Case Study:曹操出行 - 曹操出行 experienced a 143% price increase post-stabilization period, followed by a sharp decline after its inclusion in the Stock Connect, suggesting potential market manipulation as institutional demand was weak during its IPO [9][10]. Trading Data Insights - Trading data revealed a pattern of accumulation before inclusion and rapid selling afterward, indicating a strategy to profit from retail investors entering the market post-inclusion [10][12].