Core Insights - The Hang Seng Index Company announced the results of its quarterly review, which includes the addition of three stocks: CATL, Luoyang Molybdenum, and Laopu Gold, while removing Zhongsheng Holdings, increasing the number of constituent stocks from 88 to 90 [1] - The Hang Seng China Enterprises Index will add Beike-W and Horizon Robotics-W, while removing China Resources Beer and Mengniu Dairy, maintaining a total of 50 constituent stocks [1] - The Hang Seng Tech Index will not undergo any changes, keeping its constituent stock count at 30 [1] - All changes will take effect after market close on March 6, 2026, and will be effective from March 9, 2026 [1] Industry Impact - The Hang Seng Index series is a major market index in Hong Kong, attracting significant investment, with a total asset management scale of approximately $117.7 billion as of December 2025 [1] - The adjustments to the index constituents focus on incorporating new economy enterprises in sectors such as renewable energy and new consumption, while gradually reducing the weight of traditional industries [1] - This shift is expected to enhance the growth potential of the indices, thereby increasing their investment value and attractiveness [1]

Market Overview - On February 13, A-shares saw a collective decline, with the Shanghai Composite Index dropping by 1.26%, falling below the 4100-point mark [1] - The week showed a trend of initial gains followed by declines in both A-shares and Hong Kong stocks, with the A-share indices rising initially before experiencing a downturn [1] Index Performance - The Shanghai Shenzhen 300 Index increased by 0.4%, the CSI A500 Index rose by 0.8%, the ChiNext Index gained 1.2%, and the STAR Market 50 Index surged by 3.4% [1][3] - The Hang Seng China Enterprises Index showed minimal change, with a slight increase of 0.01% [1][3] Sector Performance - Leading sectors included China Shipbuilding, semiconductor equipment, and general aviation, while sectors such as fiberglass, rare earths, shipping, and CPO faced significant declines [1] Historical Index Data - Over the past month, the Shanghai Shenzhen 300 Index has decreased by 1.7%, while the ChiNext Index and STAR Market 50 Index have seen declines of 2.2% and 2.0%, respectively [7] - Year-to-date, the Shanghai Shenzhen 300 Index and the ChiNext Index have both recorded increases of 0.7% and 3.5%, respectively [7] Valuation Metrics - The rolling P/E ratio for the Shanghai Shenzhen 300 Index stands at 14.2 times, while the ChiNext Index has a significantly higher P/E ratio of 42.7 times [3][5] - The rolling P/E ratio percentiles indicate that the Shanghai Shenzhen 300 Index is at a 65.4% percentile, suggesting a relatively favorable valuation compared to historical data [3][5]

Market Performance - On February 12, the A-share market saw all three major indices close higher, with the Shanghai Composite Index slightly up by 0.05% [1] - The total market turnover reached 2.16 trillion yuan, an increase of over 150 billion yuan compared to the previous day [1] - The CSI A500 Index rose by 0.5%, the CSI 300 Index increased by 0.1%, the ChiNext Index gained 1.3%, and the STAR Market 50 Index was up by 1.8% [1] Sector Performance - The leading sectors included power equipment, liquid cooling services, CPO, optical fiber, semiconductors, minor metals, computing power leasing, and rare earth permanent magnets [1] - Conversely, the sectors that experienced declines were film and television, tourism and hotels, retail, liquor, food processing, airport and shipping, and pork [1] - In the Hong Kong market, the performance was weaker, particularly in the innovative drug sector, which saw significant declines, and technology stocks also experienced a substantial pullback [1]

Group 1 - The Hang Seng Index rose by 0.6%, while the Hang Seng China Enterprises Index and the CSI Hong Kong Stock Connect China 100 Index increased by 0.8% [1] - Huatai Securities noted that despite global risk asset fluctuations, the capital situation in the Hong Kong stock market remains relatively abundant, with significant inflows from foreign and southbound investors driving traditional sectors like agriculture, food and beverage, and transportation to strengthen [1] - Looking ahead, the peak earnings season for US tech stocks is nearing its end, and fluctuations in precious metals are expected to decrease, with potential catalysts in technology and consumer sectors around the Chinese New Year [1]

Market Performance - The Hang Seng Index fell by 3%, the Hang Seng China Enterprises Index decreased by 3.1%, and the CSI Hong Kong Stock Connect China 100 Index dropped by 2.9% this week [1] - The performance of the indices over the past month shows a cumulative change of 0.4% for the Hang Seng Index, -1.2% for the Hang Seng China Enterprises Index, and -0.4% for the CSI Hong Kong Stock Connect China 100 Index [6] Future Outlook - CITIC Securities anticipates that the earnings expectations for Hong Kong stocks have undergone significant adjustments, and the disturbances from internal and external capital factors have subsided [1] - The spring market trend for Hong Kong stocks since late December 2025 is expected to continue, with large-cap stocks showing relative gains and growth sectors supported by policy direction performing better [1] Index Composition - The Hang Seng China Enterprises Index consists of 50 large-cap and actively traded stocks listed in Hong Kong, covering sectors such as consumer discretionary, financials, information technology, and energy, which together account for over 85% of the index [4] - The CSI Hong Kong Stock Connect China 100 Index includes 100 large-cap and actively traded Chinese companies within the Hong Kong Stock Connect framework, with financials, consumer discretionary, and information technology making up over 65% of the index [4] Historical Performance - Over the past year, the cumulative performance shows a 25.7% increase for the Hang Seng Index, a 16.0% increase for the Hang Seng China Enterprises Index, and a 21.1% increase for the CSI Hong Kong Stock Connect China 100 Index [7] - The annualized performance since the base date indicates a 10.6% annualized return for the Hang Seng Index, 6.0% for the Hang Seng China Enterprises Index, and 2.3% for the CSI Hong Kong Stock Connect China 100 Index [7]

Market Overview - The three major A-share indices collectively adjusted this week, with the Shanghai Composite Index down by 1.3%, the CSI 500 Index down by 1.8%, the ChiNext Index down by 3.3%, the STAR Market 50 Index down by 5.8%, and the Hang Seng China Enterprises Index down by 3.1% [1][3]. Sector Performance - In terms of sector performance, photovoltaic equipment, batteries, power grid equipment, traditional Chinese medicine, banks, and home appliances saw the highest gains, while precious metals, semiconductors, storage chips, and AI applications experienced the largest declines [1]. Index Details - The CSI 300 Index consists of 300 large-cap stocks with good liquidity, covering 11 first-level industries [4]. - The CSI 500 Index includes 500 stocks with larger market capitalization and liquidity, covering 89 of the 93 third-level industries [4]. - The ChiNext Index is composed of 100 stocks from the ChiNext board, with a high proportion of strategic emerging industries, particularly in power equipment, communications, and electronics, which together account for nearly 60% [4]. - The STAR Market 50 Index includes 50 large-cap stocks from the STAR Market, with a significant focus on "hard technology," where semiconductors make up over 50% and combined with medical devices and photovoltaic equipment, they account for nearly 75% [4]. - The Hang Seng China Enterprises Index consists of 50 large-cap, actively traded stocks listed in Hong Kong, covering a wide range of industries, with consumer discretionary, information technology, finance, and energy sectors making up nearly 85% [4]. Valuation Metrics - The rolling price-to-earnings (P/E) ratios for the indices are as follows: CSI 300 at 14.1x, CSI 500 at 17.2x, ChiNext at 41.8x, STAR Market 50 at 162.9x, and Hang Seng China Enterprises at 10.6x [3]. - The rolling P/E ratio percentiles indicate that the CSI 300 is at the 62.9th percentile, CSI 500 at 75.0th percentile, ChiNext at 37.8th percentile, STAR Market 50 at 94.9th percentile, and Hang Seng China Enterprises at 64.8th percentile [3]. Historical Performance - Over the past month, the indices have shown the following cumulative performance: CSI 300 down by 2.8%, CSI 500 down by 1.2%, ChiNext down by 2.8%, STAR Market 50 down by 1.5%, and Hang Seng China Enterprises down by 1.2% [7]. - Year-to-date performance shows the CSI 300 up by 0.3%, CSI 500 up by 2.6%, ChiNext up by 1.0%, STAR Market 50 up by 5.8%, and Hang Seng China Enterprises up by 1.3% [7]. - Over the past year, the cumulative performance is as follows: CSI 300 up by 19.3%, CSI 500 up by 25.7%, ChiNext up by 48.8%, STAR Market 50 up by 39.6%, and Hang Seng China Enterprises up by 16.0% [7].

Market Overview - The market experienced significant fluctuations this week, with the Shanghai Composite Index dipping to around 4064 points before quickly rebounding above 4100 points. The average daily trading volume across the market exceeded 30 trillion yuan [1]. - For the week, the CSI 300 Index rose by 0.1%, while the CSI A500 Index fell by 0.6%. The ChiNext Index and the STAR Market 50 Index both decreased by 0.1% and 2.9%, respectively. In contrast, the Hang Seng China Enterprises Index increased by 1.7% [1][3]. Sector Performance - The sectors that saw the highest gains included precious metals, oil and gas, insurance, seed industry, coal, and liquor. Conversely, sectors such as military industry electronics, batteries, commercial aerospace, power grid equipment, automobiles, and humanoid robots experienced declines [1]. - In the Hong Kong market, there was a mixed performance with gold, shipping, and energy stocks strengthening, while technology and pharmaceutical stocks declined. The Hang Seng Index reached a nearly four-year high at one point [1]. Index Performance - The weekly performance of major indices is as follows: - CSI 300 Index: +0.1% - CSI A500 Index: -0.6% - ChiNext Index: -0.1% - STAR Market 50 Index: -2.9% - Hang Seng China Enterprises Index: +1.7% [3]. - The rolling price-to-earnings (P/E) ratios for these indices are: - CSI 300 Index: 14.3x - CSI A500 Index: 17.6x - ChiNext Index: 42.3x - STAR Market 50 Index: 174.4x - Hang Seng China Enterprises Index: 11.2x [3][4]. Historical Performance - The cumulative performance over various time frames for the indices is as follows: - 1-month: CSI 300 +1.7%, CSI A500 +4.5%, ChiNext +4.5%, STAR Market 50 +12.3%, Hang Seng +4.5% - 3-month: CSI 300 +1.4%, CSI A500 +5.6%, ChiNext +5.0%, STAR Market 50 +6.6%, Hang Seng +1.6% - Year-to-date: CSI 300 +1.7%, CSI A500 +4.5%, ChiNext +4.5%, STAR Market 50 +12.3%, Hang Seng +4.5% - 1-year: CSI 300 +23.3%, CSI A500 +31.7%, ChiNext +62.1%, STAR Market 50 +58.0%, Hang Seng +26.2% [7].

Core Viewpoint - The Hang Seng Index rose by 2.4% this week, reaching a nearly four-year high mid-week, while the Hang Seng China Enterprises Index and the CSI Hong Kong Stock Connect China 100 Index both increased by 1.7% [1][3]. Market Performance - The net inflow of southbound funds in January amounted to approximately 70 billion HKD, a significant increase from 22.9 billion HKD in December of the previous year, indicating a heightened interest from mainland investors in Hong Kong stocks [1]. - The rolling price-to-earnings (P/E) ratios for the indices are as follows: Hang Seng Index at 12.7 times, Hang Seng China Enterprises Index at 11.2 times, and CSI Hong Kong Stock Connect China 100 Index at 11.8 times [3]. - The percentile rankings for rolling P/E ratios indicate that the Hang Seng Index is at 61.5%, the Hang Seng China Enterprises Index at 68.9%, and the CSI Hong Kong Stock Connect China 100 Index at 95.9%, suggesting varying levels of valuation relative to historical data [3]. Sector Composition - The CSI Hong Kong Stock Connect China 100 Index comprises 100 large-cap and actively traded mainland Chinese companies, with financials, consumer discretionary, and information technology sectors accounting for over 65% of the index [6]. - The Hang Seng Index includes a diverse range of sectors, with consumer discretionary, financials, information technology, and energy sectors collectively representing over 85% of the index [6]. Historical Performance - The cumulative performance over the past month shows the Hang Seng Index up by 6.9%, the Hang Seng China Enterprises Index up by 4.5%, and the CSI Hong Kong Stock Connect China 100 Index up by 5.5% [7]. - Over the past year, the Hang Seng Index has increased by 35.4%, the Hang Seng China Enterprises Index by 26.2%, and the CSI Hong Kong Stock Connect China 100 Index by 31.9% [7].

Group 1 - The A-share market continues to strengthen, with the Shanghai Composite Index rising over 1%, achieving a 17-day winning streak and reaching a nearly 10-year high [1] - The total market turnover exceeded 3.6 trillion yuan, setting a historical record, with an increase of approximately 500 billion yuan compared to the previous trading day [1] - AI application themes surged across the board, with commercial aerospace stocks experiencing a wave of涨停 (limit-up), and sectors such as nuclear fusion, retail, and semiconductors showing active performance [1] Group 2 - The CSI 500 Index rose by 1.1%, with a rolling price-to-earnings ratio of 17.5 times, placing it in the 76.9% valuation percentile since its inception in 2004 [2] - The CSI 300 Index increased by 0.7%, with a rolling price-to-earnings ratio of 14.4 times, ranking in the 67.9% valuation percentile since its launch in 2005 [2] - The ChiNext Index saw a rise of 1.8%, with a rolling price-to-earnings ratio of 42.6 times, which is in the 40.7% valuation percentile since its introduction in 2010 [2] - The STAR Market 50 Index increased by 2.4%, with a rolling price-to-earnings ratio of 175.3 times, placing it in the 97.6% valuation percentile since its launch in 2020 [3] Group 3 - The Hang Seng China Enterprises Index rose by 1.9%, with a rolling price-to-earnings ratio of 10.5 times, ranking in the 64.3% valuation percentile since its inception in 2002 [4]

Group 1 - The Hang Seng Index closed down by 1.2%, the Hang Seng China Enterprises Index fell by 1.1%, and the CSI Hong Kong Stock Connect China 100 Index decreased by 0.9% [1] - According to Industrial Securities, in the medium term, by 2026, the profitability and liquidity of Hong Kong stocks are expected to drive market trends in tandem, with changes in risk appetite likely to show a pattern of "initial rise, followed by decline, then rise again and decline" [1] Group 2 - The Hang Seng ETF managed by E Fund tracks the Hang Seng Index, which consists of large-cap, actively traded stocks with strong industry representation, covering sectors such as finance, consumer discretionary, and information technology, which together account for nearly 80% of the index [2] - The Hang Seng China Enterprises ETF also managed by E Fund tracks the Hang Seng China Enterprises Index, composed of 50 large-cap, actively traded stocks listed in Hong Kong, with consumer discretionary, information technology, finance, and energy sectors making up nearly 85% of the index [2] - The Hong Kong Stock Connect 100 ETF, also managed by E Fund, tracks the CSI Hong Kong Stock Connect China 100 Index, which includes 100 large-cap, actively traded companies within the Hong Kong Stock Connect scope, with consumer discretionary, finance, and information technology sectors exceeding 70% of the index [2]