Bright as soon as it went public, "New Listing Hang Seng" is expected to be included in the constituent stocks, with some public funds already making early moves.

China Securities Journal, February 22 (Reporter Zhou Xiaoya) — On the first trading day after the holiday, the Hang Seng Index and Hang Seng Tech did not close higher, but the AI concept stocks’ rally arrived as expected.

On February 20, the three major Hong Kong stock indices all closed lower. Among them, the Hang Seng Tech Index fell 2.91%, the Hang Seng Index declined 1.10%, and the Hang Seng China Enterprises Index dropped 1.22%. Compared to the continued decline of the Hang Seng Tech, AI concept new stocks listed in Hong Kong experienced gains, prompting some netizens to suggest adjusting certain components of the Hang Seng Tech.

Alibaba, Tencent, Meituan, and others were summarized as “Old Hang Seng” component stocks recommended for removal. Meanwhile, the Hang Seng Biotechnology Index rose 0.96 against the market that day, and oil stocks also showed strength.

Notably, although the internet-themed ETFs and Hang Seng Tech ETF, which saw the most inflow of funds before the holiday, did not rally, some strong-performing individual stocks also attracted public fund allocations. These new stocks were laid out through IPO subscriptions, and sectors with strong performance already showed signs of increased holdings by active equity funds.

AI Concept Stocks in Hong Kong Surge

As of the close on February 20, Zhipu continued its strong performance, rising 42.72% to HKD 725; MiniMax also rose 14.52% to HKD 970. Both leading AI stocks saw their market caps surpass HKD 300 billion during trading, quadrupling or quintupling compared to their initial listing.

However, these two newly listed stocks this year have not yet been included in the Hang Seng Tech Index. In contrast, amid the 2.91% single-day decline of Hang Seng Tech stocks, components like Alibaba, NetEase, and Baidu fell more than 4%. This has brought the market cap of the two AI leaders close to that of Baidu and JD.com, surpassing stocks like Kuaishou and Ctrip, which are part of Hang Seng Tech.

Netizens have begun debating the adjustment of “Old Hang Seng” and “New Hang Seng” component stocks. Alibaba, Tencent, Meituan, Xiaomi, BYD, Kuaishou, JD.com, and Baidu are suggested to be removed as “Old Hang Seng” components; in their place, stocks like Zhipu, MiniMax, Lankeng, and GigaDevice are proposed as “New Hang Seng” components.

Compared to most individual investors who can only watch their investments double, institutional investors have already tasted the “sweetness.” Both Zhipu and MiniMax have been popular IPO targets for institutional investors, with public fund managers frequently appearing on the list of allocated new stocks.

For example, Zhipu, one of the “AI Six Little Tigers,” had cornerstone investors including international long-term funds, well-known industrial capital, and investment institutions at IPO. Data shows GF Fund was among the cornerstone investors, while Bosera Fund (International), Wanguo Fund, Wanguo Asset Management (Hong Kong), and Huaxia Fund, as related clients, also received allocations.

MiniMax attracted cornerstone investors such as Harvest Hong Kong and E Fund. Similarly, Bosera Fund (International) and Huaxia Fund appeared on the related client list.

In contrast, many existing Hang Seng Tech components were reduced in the fourth quarter of last year. Wind data shows that as of the end of Q4 last year, 908 funds held Alibaba Hong Kong stocks, a 20% decrease from the previous quarter, with reductions in both holdings and market value. For individual funds, Alibaba was removed from the latest top holdings of funds managed by Feng Ludan (China Europe Digital Economy), Wang Guizhong (Harvest Technology Innovation), and Ren Xiangdong (Xingquan Heheng Three-Year Holding).

Components like Xiaomi, SMIC, BYD, Tencent, and Kuaishou were also actively reduced by equity funds in Q4 last year, though Meituan saw active fund increases of over 17 million shares in the same period.

Oil and Innovative Drug Sectors Strengthen

Under the influence of geopolitical factors, international oil prices have recently risen consecutively, and the oil sector in Hong Kong stocks has also strengthened. The market shows that CNOOC International led the gains, with China National Petroleum Corporation and CNOOC Services rising over 3%, and China Marine Oil and Kunlun Energy also closing higher.

The oil sector was also one of the sectors increased by active public equity funds in Q4. For example, China National Petroleum and China Marine Oil were both increased by over 63 million shares in Q4 last year; China Petroleum & Chemical Corporation also increased holdings by 54.82 million shares.

Notable fund managers have increased their positions in oil stocks, such as Liu Xu’s Dacheng Gaoxin, Liu Yanchun’s Invesco Great Wall Quality Growth, and Miao Yu’s Dongfanghong Ruitez three-year holdings. Miao Yu mentioned in quarterly reports that there is a significant expected difference in oil and petrochemical stocks. Li Yaozhu of GF Hong Kong-Shanghai-Shenzhen New Starting Point also increased holdings, noting that resource company valuations are being re-evaluated and commodities still have good allocation value.

Additionally, the Hang Seng Biotechnology Index, which rose against the trend on February 20, saw BeiGene increase over 4%, Kangfang Biotech over 3%, and CSPC and Innovent Biologics also close higher. Although active equity funds mainly reduced their holdings in the biotech sector in Q4 last year, some stocks still gained favor from fund managers.

For example, the previously high-performing fund managed by Liang Furui, the Great Wall Medical Industry Select, added new holdings of BeiGene (Hong Kong and A-shares) and Kangfang Biotech in Q4. Citing the fund’s quarterly report, Liang Furui said that many innovative drug stocks at the end of last year were highly cost-effective. The fund adjusted its overall holdings into two lines: “BD” (business development) and “non-BD.” “BD” stocks focus on MNC pipeline importance and global clinical progress, while “non-BD” stocks are based on core pipeline competitiveness and scarcity. As the impact of centralized procurement on financial statements winds down and the innovation transformation of imitation and innovative companies enters a verification phase, the fund increased positions in imitation and innovative firms.

Kangfang Biotech and BeiGene, as the top two holdings of Ping An Healthcare, were also increased in Q4. Fund manager Zhou Sicong’s quarterly report indicated continued optimism for growth sectors like innovative drugs and medical devices, with a focus on industry prosperity, business models, competitiveness, and performance to identify high-value companies, especially emphasizing innovative drug investments.