Tencent, Alibaba, Xiaomi, and Meituan surge together! After two weeks of extreme pessimism, Hong Kong internet stocks are now experiencing a recovery.

On April 8, on news that the ceasefire at the periphery is favorable, tech assets in emerging markets rallied across the board. Hong Kong stocks in the internet sector, which had fallen more sharply, also saw a rebound after reaching extreme pessimism. Tencent, Alibaba, and Xiaomi’s share prices all rose, with gains exceeding 3%. Meituan rose more than 6%. The Hang Seng Internet ETF Huaxia (513330.SH), which covers the above weighting stocks, also rose more than 3%.

The strategy team at Huatai Securities said: The latest reading of the pre-holiday sentiment index for Hong Kong stocks was 28.6. After first touching the panic range on March 26, it has still remained in the panic range. Since 2024, this sentiment index has triggered seven times of panic. The T+14/T+21 win rates and the averages of percentage gains/losses are 86%/100% and 4.0%/3.8%, respectively.

The strategy team at Industrial Securities pointed out: After experiencing sustained adjustments in the early period, the Hong Kong internet sector has already priced in pessimistic expectations to a fairly sufficient extent, and pressure for further downward revisions to earnings is easing. As expectations for mid-term Iran-U.S. negotiations gradually become clearer, if geopolitical conditions show marginal easing, it may provide a window for a recovery in market sentiment. Overall, although short-term volatility is inevitable, the Hong Kong stock market has increasingly demonstrated resilience in both valuation and earnings, and has begun to form bottoming-region characteristics.

Individual investors who do not have trading access to Hong Kong stocks or the Hong Kong Stock Connect can consider the Huaxia Hang Seng Internet ETF (513330.SH). The target index’s constituent stocks include a basket of internet industry leaders, covering companies such as Alibaba, Tencent Holdings, Baidu Group, Xiaomi Group, Meituan, and others. They account for a total of 70%, with the leaders relatively concentrated.

Compared with Hang Seng Stock Connect internet ETFs, the Huaxia Hang Seng Internet ETF’s features are: it covers Hong Kong internet giants more comprehensively, including Baidu Group, JD Group, NetEase, GDS Holdings, and others that have not yet been included within the scope of the Hong Kong Stock Connect. It supports T+0 same-day round trips. Fund investors can also use a periodic investment plan in batches into the Huaxia Hang Seng Internet ETF Connect C (013172.OF) when prices are low.

Daily Economic News