The bottom rebound of liquidity recovery—Commentary on the significant rise of Hong Kong stock technology-related ETFs

Today, the Hong Kong stock internet ETF (513720) rose over 6% intraday, and the Hong Kong stock technology ETF (513020) increased over 4.5% intraday.

【Analysis of Major Gains】

Geopolitically, overnight the US and Iran reached a two-week bilateral ceasefire agreement, releasing investor panic sentiment, and liquidity has somewhat recovered, driving a rebound in Hong Kong internet-related sectors that are highly sensitive to capital flows.

On the industry catalyst front, the release of DeepSeek-V4 is imminent, with the entire system possibly adopting domestically developed computing architecture, strengthening market confidence in the domestic computing industry chain.

【Market Outlook】

Structurally, FY25 annual reports show that leading internet companies are generally in a stage of revenue growth, profit pressure, and increased investment. The AI capital expenditure front-loading has delayed profit realization, combined with changes in some business competition patterns, leading the market’s profit center expectations to become more cautious. Coupled with external liquidity pressures, the sector has undergone a prolonged period of deep adjustment. However, from an industry marginal change perspective, policy signals to curb internal competition on food delivery platforms may lead to a phase of profit reduction and recovery. Additionally, AI remains in an accelerated iteration stage, and new models like DeepSeek-V4 are expected to drive market re-pricing of AI agent commercialization, deep integration of AI and cloud services, and increased demand for domestically produced chips.

Southbound funds continue to flow net into the market (over 220 billion HKD in Q1), and Hong Kong stock trading volume has increased year-on-year (average daily trading volume in March about 300 billion HKD, +8% YoY), indicating some market liquidity support. Meanwhile, the valuation of the Hong Kong Stock Connect internet index and technology index is at a low level of about 11% and 26% respectively over the past five years, showing good value. However, foreign investment risk appetite has not yet significantly recovered, and geopolitical uncertainties and overseas interest rate fluctuations still exist, so short-term Hong Kong stocks are likely to mainly experience oscillation and recovery. Additionally, the recent strong performance of the Hong Kong Stock Connect A-H premium index suggests that, as liquidity stabilizes, the rebound pace of Hong Kong stocks may still be relatively weaker than A-shares. From a medium-term perspective, if external risks ease, the Hong Kong tech sector still has some upward recovery potential. Interested investors can continue to monitor market liquidity and risk appetite changes, and adopt a phased, dip-buying approach for steady deployment.

Related products: Hong Kong Stock Technology ETF Guotai (513020) offers a one-click balanced allocation across four cross-border tech themes: “Internet + New Energy Vehicles + Chips + Innovative Drugs,” with a higher proportion of innovative drugs accounting for 14% in the FY25 performance outlook. Hong Kong Stock Internet ETF Guotai (513720).

Risk reminder: Mentioning individual stocks is only for industry event analysis and does not constitute any stock recommendation or investment advice. Short-term index fluctuations are for reference only and do not predict future performance, nor do they constitute a promise or guarantee of fund performance. Opinions may change with market conditions and do not constitute investment advice or commitments. Different funds have different risk-return profiles; investors should carefully read the fund legal documents, fully understand product features, risk levels, and income distribution principles, and choose products that match their risk tolerance, investing cautiously.

Daily Economic News